The Government doesn't know how to Stimulus my Package.

Love it!
I thought of that title on my way to the bathroom at work. As I passed a co-worker I said "the government doesn't know how to stimulus me..." and she added to icing to the cake to make it title-tastic.

One of my bosses told this story to us to explain inflation and it totally relates to the aforementioned magna-title.

Imagine I have a room full of people and it is an isolated functioning society. They all go to sleep and I slipped one dollar in coins into their pocket before they wake. When this small society wakes up they all have a dollar and they all begin living their individual daily lives. Soon people self-select into specialties and because they have currency in the form of a dollar they trade amongst themselves to acquire other necessary components that they do not individually have the time to provide for themselves. This is roughly where we are now except we evolved to be here and we didn't all just wake up one day with a buck in our pocket. Not to mention we're not all locked in a room and a creepy man doesn't sneak around slipping money into our pockets... at least not all of us. Work with me here people... the analogy is good, just trust a little.

So what say you if everybody goes to sleep after the first day. People have accuired un equal incomes through out the day. This is a perfect manifestation of the fact that some commodities of life are worth more than others and people are willing to pay a little bit more out of their dollar for those specific goods. That is to say... if I were locked in a room all day I might pay a little bit more for a bite to eat then a basketball. It's just subjective value.

So everyone is asleep again and I walk around and slip ten dollars into everybody’s pocket as they sleep... Naturally when the society wakes they will rejoice with their new found riches. Yesterday the individual only had a dollar, now they have ten and what a day to be rich!!

That's not where the fairy tail ends though... you see when they go to their little market place and trade their dollar for what ever it is they demanded they soon realize that everyone has 10 more dollars and... suddenly what was one yesterday is suddenly the same as ten today.


In a large market economy this process is called inflation. It doesn't happen immediately because inflation never gets realized by the dollar value in the primary transactions of infused money. It is a response by the market, that is dealers in the market, to a deflated monetary value. So yes, in the short term a stimulus package will get people to buy and energies the market but it's a lie because everybody has more money proportionally. So I'm not stimulated sorry government... not tonight. I'm going to bed.