The Allegory of the Economic Stimulus

There’s a lot of talk about this stimulus package going on – some of it ‘for reals’ and some of it is hot air.

I question the intentions of everyone.  Everyone has an agenda.  Some want to kill the stimulus just to show that they (Republicans) aren’t dead yet.  Others genuinely oppose such huge government spending.  Others really want pork.  Others genuinely view this as a way to prop up our economy and create jobs.

I see it this way…

WhiteEyebrows’ Economic Allegory

Imagine a very large house – a mansion.  The mansion is big and beautiful.  It is constantly under construction/expansion.  The owners are filthy rich.


In the last few expansions the contractors perscribed some ‘structural enhacements’ to the core of the house which would make the house easier to remodel and expand going forward.  They removed many major support beams and tried to just distribute the load of the enormous structure on every 2×4 in the house.  This would allow them to build onto it faster and cheaper, and without regard to structural engineering.

The house continued to grow at an astouding rate.  New floors, patios, porches, wings, and garages were added like crazy.  Then one day, lacking the structural integrity to bear the weight of all the new construction, a key part of the house slowly started collapsing.  It didn’t happen all at once.  Several workers started seeing cracks in the plaster while others just felt that something wasn’t right.

Then there were some bad days.  Whole pieces of ceilings and walls started collapsing, but the house still stood – distributed across the weight of much of the rest of the house.  Some part of the house were unaffected, and others were slowly and completely decimated.  Soon, there was a big gaping hole to the exterior of the house for the whole world to see.  Slowly but surely the hole grew until a large, central part of the house was considered rubble.

The many workers got together to decide what to do.  Two solutions emerged:

  1. They could pay massive amounts of money to hire scores of people to come in and quickly clean up the mess.  Then pay more people to continue building by doubling the number of materials.  Instead of using 1 2×4 for each stud, they would use 2 2×4’s.  They would simply double the materials, propping up and supporting the old, poorly built construction by fusing new material onto it.  Then hastily building new construction over the areas of the collapsed house to return it to tip top condition.  This new work would hide the destruction of the past and patch up a good number of structural problems.  This would be the most expensive solution, but might produce results quickly.
  2. They could go in and strategically place temporary supports in the house, which would keep the destruction from spreading to other parts of the house.  This would buy them time to repair the structural problems they had created for themselves.  They could hire some real structural engineers and create new, innovative ways to support, monitor and regulate the massive weight of the structure that they would undoubtedly want to continue building upon after this crisis was over.  This would cost less, take more time, be much more painstaking, and show results slowly.

Which way would you rebuild the house?

3 thoughts on “The Allegory of the Economic Stimulus”

  1. Great analogy.

    Personally, I would say that there should be a mixture of BOTH strategies. First, some greatly-needed triage would need to happen to, if nothing else, make the home inhabitable. Not perfect, but inhabitable. And while that is being done, the more in-depth plan should begin taking shape so that a long-term solution can be found and implemented as quickly as possible. If the either option were the ONLY option pursued, I would guess that the whole house would tumble down and need to be rebuilt entirely from the ground up.

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