David, a long-time contributor to the blog, recently raised an issue in a private email that I thought warranted discussion.
When is it ‘patriotic’ (or at least in the public interest) to intentionally spend money in order to help revive the economy?
President Bush encouraged Americans to ‘go out and spend’ in order to get society back to normal, and stimulate the economy, soon after the attacks of September 11, 2001. Granted, this pandemic is not a single event, but a phenomenon of global proportions. And it’s not over yet.
Still, I think I’d like to hear everyone’s thoughts about spending money on things that would not otherwise be purchased in order to help the community and the country.
It’s completely contradictory to everything we talk about on this blog. But do circumstances ever warrant it? If so, how much would you spend? Where would you spend it? How often? And for how long? Does it really help? Or does it just make us feel better?
Is it just propaganda from public officials, supporting corporate interests? Is it just a way for us to do some ‘retail therapy’ and rationalize the behavior?
Looking forward to hearing your comments. Be safe.
- BGT
Patriotic spending to me is to spend for the wellbeing of your fellow countrymen. Buy more food to put in food pantries. Buy local. Buy better quality, lower amount from responsible supplier who care about their employees and environment. It would also helps reducing the burden of people in distribution lines who pack your items. Mindless spending are not only just benefit big corporations, it doesn’t achieve the target of helping the community.
On point, Sasha. Local, local, local. Thank you. – BGT
This one requires the lawyer’s standby response: it depends.
I think you can apply some of the old money principles to efforts to strategically spend with the goal to assist others. Not by purchasing things you otherwise might not, but rather by paying for things you might not otherwise have paid for–or shifting to whom you pay. For example, (in non-pandemic economically challenging times), perhaps you eat at locally owned and operated restaurants more frequently. Particularly those that employ local residents, their children, and also utilize local farmers and producers in their supply chain. And you can find these same producers to purchase from directly when cooking at home. Or perhaps you purchase the new tires from your local mechanic a couple of months earlier than absolutely necessary, or outsource a project you may have undertaken to give some work to a local, reliable handyman.
Certainly the pandemic aspect of the current economic pain presents some additional, and unique, challenges. But regardless of the cause of urge to spend patriotically, there are likely a number of additional areas where your money can strategically benefit others without causing you the throw out the very principles that have insulated you from some of the financial hardships others may experience. At least there are several that don’t require buying an unnecessary electronic device from a big box store merely in the hopes of some small trickle down to employees.
Well said, David. Thanks. – BGT
Timely post, as my wife and I just discussed this. We decided to move forward on some home improvement projects that we had been considering for a bit. Fairly sizable projects, they will provide business for local contractors and work for their employees. We’re under no illusions that we’re saving the world, but we figure it helps a little and provides a better long-term and meaningful return for us than would spending on material goods.
Good for you, Bill. Good luck with the improvements. – BGT
I live in St Paul, just a few miles from the massive destruction in Minneapolis that took place late in May after the killing of George Floyd. That area is populated by many immigrants, some of whom have spent decades building up their businesses—restaurants, clothing stores, food shops. They are people we know, and care about. As things have re-opened, we’ve taken care to revisit, especially the restaurants. We order food to go, and tip generously. No, we’re not saving the world, either, just looking to help rebuild our corner of it.
Good call, Katie. Keep spreading the wealth and the goodwill. – BGT
As I live just west of Minneapolis, I am very heartened by this suggestion. It may not be world-saving, but it is important, and I think helpful to the communities hit hardest by both the pandemic and lack of social justice in our community. That we have such thoughtful and compassionate neighbors in the Twin Cities community gives me hope as to how we’ll respond to all the unmet need and injustices in our state and country.
Thanks, David. Stay safe there. – BGT
The global and U.S. economies will be somewhat different after the pandemic recedes but our corporations and businesses are nothing if not adaptable. Stick with the old money principles; buy what you need but don’t spend just for the sake of spending.
If you have a million dollars, you could give one dollar to one million people. They wouldn’t be much better off but you’d be a lot worse off. It’s easy to follow the old money principles when it’s convenient and comfortable to do so, but when it’s tempting to do otherwise we find out who the true OMGs are. Or as Warren Buffett said, “it’s not until the tide goes out that you find out who’s been swimming naked.”
The impulse to help is understandable, but spending money needlessly is just as bad now as it was before the pandemic. The economy will be fine. Don’t overreact.
Wise words, Amy. thanks. – BGT
We are not spending any extra. We know it is likely that one or both of us could lose our jobs if the pandemic continues on into 2021. It is only prudent to put a few extra dollars aside. We have reallocated our charitable giving to organizations closer to home. One of those is an organization helping our foreign college students with food and rent since many have been unable to travel home for the summer as planned.
Thanks, Janet. Kudos for helping those young people. – BGT
We live in Canada on Vancouver Island, about seventy kilometres north of Victoria proper and about a two hour ferry ride away from the city of Vancouver, which is on the mainland of British Columbia. We closed our borders to the United States months ago which, unfortunate as it has been for a few, was the wisest thing for us to do, as Canadian COVID numbers, especially on our island, are far lower than America’s numbers. No-one we know wants the border reopened anytime soon.
As for ‘spending to support’ options, we have tried to do our bit. We pre-paid our cleaning lady for several months in the future as we detected hardship with those she keeps company with. Our other endeavours may seem small, nevertheless we hope we are doing our bit in the purchases we make.
The local branches of the Royal Canadian Legion have been making cotton face masks that many here are purchasing. People here are quite keen on wearing masks and the ones from the Legion are selling out in some places. They use colourful and sometimes vintage fabric, so they have a bit of the style to them.
We drive down to a local butcher shop near Duncan that has been in the same family since 1928. All meat is local from their farm and they cure and carry their own beef bacon. They also prepare Irish bacon and the thin streaky Ayrshire (Scottish) bacon. We have a lot of ex-pats from the UK and other Commonwealth countries that live here so all this sells out pretty quickly. Same for the farmer’s sausage, made the same way as in South Africa. Pre-Covid when we would go in to the butcher there may be four other customers, but now there are usually a dozen or so, all or almost all, now wearing masks.
Our various farmer’s markets are still open here but with social distancing. We are used to purchasing our own local bread, cheese, island made Scotch and now gin (!), vegetables and the like. The farmers at the markets are reporting increased sales, which is good and the markets seem more crowded than ever. Like many here, we now purchase Canadian first whenever a purchase is warranted.
Like many here in Canada and especially here in British Columbia and on the island, we are of Scottish heritage, so we are mindful of our spending. I still wear the same Harris tweed jackets that were my fathers and older brothers. I may wear them with denim jeans or frayed bottom khakis, but always with polished Church’s English shoes. For the most part we wear the clothing we have always worn but ‘make do and mend’ if that is needed.
We have also seriously upped our giving to local island charities that keep abreast of where the needs are locally.
Most of the local pubs, including the one in our village are open again, and that is a very nice thing indeed!
Thank you, Crofton. “Local” sounds like the key word with a few of these comments. Making a difference in the immediate area. Keep safe and well, and have a pint for me. – BGT
I think it is less important to spend MORE than to spend WISELY, and support people and companies whose values align with your own. I am getting married at the courthouse in a few weeks and we are buying a house, because it makes sense for us right now.
What I am weary of are the constant dire predictions.
Just keep livin’
Keeping calm is a very old money trait.
Good point, Elle, and congratulations! Love, long life, and prosperity for you both. – BGT
Up your spending if there is a “mom and pop” business in your town. In my case a Pizzeria, a farmers market (they sell milk in glass bottles still) and a used bookstore.
I certainly wouldn’t buy a new car or burnt chain coffee.
It’s very importatnt to do this in NYC. The rents for small businesses are very high. When I was in the city I had my regular places and all locally owned.
For the most part we are sticking with the lifestyle outline in your book.
Great insight, Bob. Thanks. – BGT
Patriotic is the Nordic model: Pay taxes and let the government tackle inequality and social injustice anytime — not just during a crisis.
Spending more, even building a new house, is economic patchwork. It won’t solve structural issues.
Good call, JL. Thanks. – BGT
I have been spending very selectively. It’s not that I am spending on things I wouldn’t normally buy, but I have been making a concerted effort to buy locally and support smaller businesses that manufacture in America. Our local restaurants are very hard hit, so many are now selling groceries and other provisions, as well as meals, on a take out basis. Rather than hit a big chain grocer, I’ll add fresh produce and paper goods to my meal take out orders to help some of these beloved small institutions that provide local jobs and support local farms as suppliers.
Good to go local. Thanks, Dolley. – BGT
Interesting question. I’m blessed to have a secure (so far) job. I’m doing my Christmas shopping early. It puts the money into local businesses (I only shop local if I can help it. Amazon does nothing good for the economy or the environment), it means I can plan my purchases out (instead of spending only in December), and it means I won’t have to go shopping in the winter, when everyone is out, and the flu comes to visit on top of Corona. As for buying more than I otherwise would, eh, not so much. I bought myself a pitcher and glasses for entertaining and a new outfit for my birthday, and maybe a few extra caramel macchiatos.
Thanks for sharing, Gwen. A solid, deliberate approach. – BGT