Thursday, February 19, 2009

Economic Stimulus

Economic Stimulus

This is something that I have considered for a long time; however, I never had any reason to think that anyone else would be interested; or at least any reason to think that anyone would listen to me. However, with the current economic circumstances and the need for economic stimulus; it’s occurred to me that what I put here could possibly be considered as helpful and possibly quite a serious proposal concerning the stimulating of the American economy.

Much of what I’m writing here will necessarily be in generic terms; and basically hypothetical. I don’t know that much of the specifics of the lottery system(s) currently operating in the various states.

However, say that hypothetically, a state lottery starts out at a million dollars a week. Under the current system, it’s possible for one player to earn up to a million dollars with a few others winning between 3 and 20 dollars.

Note that it’s been pretty well documented that there have been many folks who have won the big lottery only to end up in dire financial straits. Also, consider the factor that “How many people actually need a million dollars?” Emphasis on need!

So in this case, you have a single person winning up to and frequently over a million dollars, considering the case of a lottery that goes un-won for several weeks; and a relatively small number of players winning between 3 and 20 dollars.

Concerning these lottery games, including both state lotteries and the multi-state Power Ball games as well. I’d like to suggest that rather than the one big winner, there are various numbers of smaller winners. Consider the number of ways a million dollars can be divided up. Rather than making one new millionaire; who may just retire and waste his/her money; you could have up to 20 folks winning $50,000, in which case of the 20 people, there could be one or two who start their own business. Or, rather than one millionaire, you could have up to 50 folks winning up to $20,000. Within a state, this could generate more economic stimulus than one millionaire. Frankly, I’d take it even further. In place of one millionaire you could produce 66.6 folks winning up to $15,000; 100 folks with $10,000; 200 with $5,000 or 1,000 with $1,000.

Think of the stimulus package of a year ago which gave up to $600 per household or $300 per person. Consider that one state on an almost weekly basis could generate $1,000 for 1,000 different people. Use your imagination; this could really be economic stimulus that would take effect immediately, and on an ongoing basis, and could really spread throughout the economy.

You could even have different games on different weeks. For instance, one week you could have the 20 winners of $50,000; other weeks the division would be 50 winners of $20,000. Again, these amounts could generate some to start or grow a small business. Personally, I prefer the concept of more folks, winning relatively smaller amounts. Remember, for a lottery starting at a million; you could generate 1,000 folks with $1,000. And that could be on a weekly basis. 52,000 folks a year!

It’s my thinking that more folks would play under these circumstances. Personally I question how and why so many play for the big lottery numbers. I’m not certain what the odds are but, hypothetically, let’s say that the odds of winning the million dollar lottery are one in a million. Then how many folks have a chance to win? However, divide up the winnings as described above and the chances of winning become increasingly better. Knowing that there will be as many as 1,000 winners of $1,000 or maybe 500 winners of $2,000 or even 200 winners at $5,000 would seem to me to be a much more attractive possibility and I personally would be much more likely to play, thinking that I have a much better chance than the old 1 in a million.

These amounts of money spread through the economy could well do very good things.

There are other things to be considered. Not everyone likes the idea of a lottery. They don’t consider it to be honest money. If the lottery was divided up as described; it could well be thought of as more like buying war bonds have been considered in the past. In other words, you may win $1,000 by purchasing a ticket, but, even if you don’t you could consider that you have contributed to the stimulation of the economy. Something that is sorely needed nowadays!

It’s even possible that participation would increase, therefore increasing the effect of the stimulation.

Consider all the possibilities of multiple winners of the relatively smaller amounts. There are so many, each that could be of a positive effect on society. And, consider that the relatively smaller amounts are not really that small of an amount if you consider that the smallest amount I’ve considered above is $1,000. How many people could use an extra $1,000 on top of their normal income?

A couple of possibilities come to mind. Say a relatively well off person is not in need of pinching pennies, but has been putting of some remodeling due to the current economic circumstances. Should that person win $1,500, they may well decide to go ahead with their remodeling and therefore a job for a contractor and supplies. Or, say a contractor wins $1,500; they may decide to give out bonuses of $200 to three of their employees, keeping $900 for themselves and their business; or, give $100 to five employees and keeping $1,000. There are very many ways that this money could make a positive dent on the current economic circumstances.

For many it could mean house payments or even a down payment.

What’s been written above is all based on the hypothetical circumstances of state lotteries starting out at one million dollars. However, take the same concept and apply it to the multi-state Power Ball lotteries and multiply the results. I’ve heard stories of Power Ball winnings as high as $132,000,000. What individual or even family needs that kind of money? And, how many individuals and/or families could use a portion of it? Just think how far that amount could be spread and what a benefit there could be for society in that case.

Consider the possibilities!

Personally, I can think of numerous scenarios where a distribution of funds in this fashion would/could be of good benefit.


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