Spend smart, but don’t stop spending.
By Jeff Reinke, Editorial Director, PD&D
 "The most terrifying words in the English language are: I'm from the government and I'm here to help." |
January has been a busy travel month for me personally. To be honest I’m not sure if this stems more from professional responsibility or generating a plausible escape from the Wisconsin cold.
In any respect, last week I was able to catch a few minutes of CNN between trade show rounds, and took in some of the debate over President Obama’s new stimulus package.
At the risk of sounding like a true politician and waffling my way though what I think about the plan, I’ll just state that hearing from both supporters and critics reminded me of an old Ronald Reagan quote, “The most terrifying words in the English language are: I'm from the government and I'm here to help.”
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It also made me wonder about how the flow of this money into the economy, eventually, will truly help. After all, we’re looking for assistance from a group of individuals who are more than happy to run their organization (err … our country) at a monetary loss.
If any of us ran that budgetary approach up the flag pole, the last place we’d be sitting is in plush leather chairs like those found in legislative halls.
So instead of relying upon the government to pump some dollars into the economy, maybe we need to do it ourselves. Now, I’m not looking to champion the cause of spending for the sake of spending, but there are instances where declining to pander to the constant barrage of bad economic news can play a greater role in helping us all help ourselves.
Among the parade of less than uplifting economic reports unveiled over the last couple of days were those indicating how consumer spending and capital investments were continuing to decline. My first thought was that during tougher economic times this makes sense. But then I shifted to how this could relate to our long-term situation.
Let’s say that part of your company’s budget cut-backs include fewer CAD software seats, or putting a hold on upgrades. Well, this impacts the sellers and distributors first, and then it goes back to the company itself as they feel the pinch of fewer sales.
The software developer might initially decide to hold off on enhancing their product with newer versions, hurting the potential efficiency of the entire marketplace and possibly displacing a few workers.
Closer to home, if that re-seller or distributor isn’t selling and that developer is out of a job that means they have less discretionary income for the very product that your company may design or produce. You waiting to upgrade means he has to wait on a new washing machine. So we’re at a stalemate that the consumer thinks the government can solve. The problem is that their track record indicates a different direction of preference.
So my plea is simply this. Spend smart, but don’t stop spending. We as private and business consumers can stimulate the economy, which due to its very nature is both cyclical and self-recovering. The only problem is that the physician cannot be afraid to heal itself.
What's your take? Email jeff.reinke@advantagemedia.com.