Thursday, May 21, 2015

Steve's barking; Stimulus by the private sector

In them olden days called the depression movie houses offered a door prize to bring people into the theaters, usually a set of dishes.
When I was a young adult and interest was low, banks would offer small appliances if you open an account with them.
 In the present day credit cards are offering incentives to use there cards and to spend, spend, and to spend some more. The FEDS stimulus package has hit a brick wall, but credit cards and with their incentives are going like gang busters.
Besides credit cards, stores are in on the act, the more you spend the bigger the discount the next time. My drug store is big on this.
My supermarket has an incentive for every hundred dollars I spend I get ten cent off the pump price at a particular brand of gas. Don't think I don't do stupid and spend an extra few dollars when I'm close  to a multiple of a hundred dollars.
I just signed up for a new incentive program that has several retailers, from drug stores, rent a car company, insurance company, and a major department store that gives me points that I can use to get discounts in the places that participates in this program.
Now these card companies, retail outlets etc, think about their program as an incentive  for their customers to spend with on what they sell, or just to use there card, but if you think about it, their incentives are a kind of stimulus. Private sector stimulus for the whole economy.
It just came to me that an unthough of consequences of incentive is a stymulus for the economy.

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