Ask the grumpies: Bang for the buck with stimulus funds

Becca asks:

What are you doing with stimulus funds? Do economists know which kinds of ways to spend it will ripple the furthest?

The very short answer is that economists don’t get stimulus funds (they earn too much).

Right now donating to food banks is probably the best bet because getting people fed has huge beneficial effects on everything that creates or costs.  Basically anything that helps kids will have bigger bang for the buck than things that help adults (There’s a really interesting not technically meta-analysis, but colloquially meta-analysis, on this by Nate Hendricks and Raj Chetty and someone else, I think, but basically programs to help kids help the economy in the short and long term by more than anything else).  Feeding people makes them more productive, less hangry, helps their mental facilities, decreases their stress, increases their growth etc. etc.  There’s a reason it’s near the base of the hierarchy of needs.  An email I just got says that “40% of households are reporting moderate to high levels of food insecurity and 20% of children are experiencing food insecurity.”  Many food banks (at least those in the Feeding America network, according to an employee who gave a guest lecture in one of my classes a few years back) also have access to the wholesale food markets, meaning that all that food that isn’t getting bought by restaurants can be distributed to foodbanks from the larger networks.  Money to grease those wheels can do a lot of good.  (Here’s a webinar.)

Also (less mainstream economics opinion now): activism is going to have a huge impact over the next year—if we lose the post office, if they don’t take steps to make outside safer, if they re-elect Trump, all of this will have lasting impacts on the economy for generations.  So… call your congresspeople about the post office.  Buy some post-cards and stamps or printer paper and stamps and do post-cards to voters or letters to voters.

In terms of buying things that you want and not just giving money away?  That’s harder… I mean, oil prices are down, but long-term we don’t really want more driving because climate change is bad for the economy long-term.  Stick to buying from small shops not through amazon or places like instacart or grubhub.  We want to decrease the monopoly power of these companies– competition is a good thing.   I have been using amazon as the last resort these days even if it takes longer to get things elsewhere.

What are you doing with stimulus funds?  

31 Responses to “Ask the grumpies: Bang for the buck with stimulus funds”

  1. Michael N Nitabach Says:

    I’ve been stimulating the niche perfume industry!!!

  2. Leah Says:

    I donated to our local nature center and zoo. Both are hurting too. Also donated to Fair Fight (Stacy Abram’s group). And I’ve been shopping local at small bookstores, takeout at local restaurants, etc. Basically spending money at places I want open after all this.

    There’s a new website to compete with Amazon for books if you don’t have/know your local store. It’s called Bookshop. You can pick a local store. If you don’t pick, they’ll spread the local store portion of profits to all their network stores. It’s an easy way to generally support indie bookstores.

    I have spent more on books since this began than perhaps ever ($300 ish so far). We miss our library so much, and ebooks are hard with kids. I’ve purposely sought out diverse voices and am excited for what we are putting on our shelves.

    • nicoleandmaggie Says:

      Ooh thanks! I was trying to use indie books but our “local” is a half priced books and they don’t tend to have everything. So DC2 has been getting whatever ebooks are available from the library and growing a wishlist that I was going to deal with after school got out.

    • Debbie M Says:

      When I was researching my local bookstore, they were working with another company (not sure if it was Bookshop), and I decided I wasn’t sure how much money they were getting. So I went with Powell’s, a gigantic, but independent bookstore not local to me. I see that now my local bookstore (BookPeople) is shipping their own books, though wisely still not opening their doors.

      • Leah Says:

        I also ordered from Powells. I went to college near there and still love visiting. Tho it did take a month to get my books, so I hope it means they’re getting decent business right now.

        Our neighbor works at the local bookstore and still goes in one day a week, so it’s nice and easy to order online and specify that she’ll hand deliver. I got several new books for our almost 6 year old that way. She’s ready for chapter books, and I’m tired of reading the same ones over and over, so I got an assortment of ones friends recommended.

        With Bookshop, sounds like they have a nice distribution model to support indie bookstores broadly. They offer higher affiliate percentage to book bloggers too. They started as a way to compete against Amazon. Thanks to the pandemic, they now have 1% of the book market share, and they are hoping to grow more. Their main goal (other than competing with Amazon) is to make sure indie bookstores can still stay in business.

  3. FF Says:

    I’m a sole proprietor whose business is down >50% vs. last year. I’m spending it on paying bills. Hopefully, EIDL and/or PPP will come through for me soon.

  4. Dana Says:

    So far donating to food bank and other charities. I’m not sure what we will do with the rest. We are in a fortunate position and I’d like most of it to go to people who need it more than us.

  5. Revanche @ A Gai Shan Life Says:

    I have a long list: indie bookstores, food banks, the zoo even if I don’t particularly approve of zoos in general (the animals still need care and feeding), The Human Utility because people need water service, the local humane society which is feeding people’s pets when they don’t have the money for pet food, I’m still taking contributions to fulfill needs for folks on the Oglala Lakota Native American reservation.

  6. Jo Says:

    We wouldn’t be eligible for stimulus funds– my income last year was too high. I’m self-employed, but have no work right now. I have not tried for ppp or help from outside, mostly because I have enough savings that we can run on them for quite some time to come. That said, I’m deeply worried for our further-out future. I don’t have a lot of faith in a vaccine being developed, adequately studied, and distributed on a good timeline. I do believe all of the experts who are saying that things are going to get bad. I don’t know if I can protect my family to the level and degree that is needed.

    If we did receive stimulus funds, I know that I would feel like I ought to donate them but unfortunately also recognize that I wouldn’t. I hate that I see this in myself–I would like to believe more highly in my own altruism. We’re okay for now, but with no work and not knowing when new work would even be a possibility, the money would go where all of my money is at the moment– waiting to be used for mortgage/taxes/food/etc. in the months and possibly years to come.

    • nicoleandmaggie Says:

      I’m worried too.

    • Revanche @ A Gai Shan Life Says:

      FWIW, I think it makes sense that, in your position as a self employed person with a very uncertain long term outlook, I’d hold onto the money too. Your equation is very different and more immediately difficult than for those of us who both have savings *and* still have current income with some reasonable expectation of income for at least months into the future. Even though my employer is currently stable I am a pessimist and won’t go so far as to say YEARS into the future. That’s one less layer of financial protection that you’re missing so it’s totally understandable that your gut instinct would have been to hold onto it. Mine would be. But that’s also why I am determined to keep giving now. I believe if we can responsibly give without endangering ourselves, we should.

      And even with relatively stable jobs (my spouse’s more than mine), I still worry about the future, both for us personally and collectively for everyone. This is going to have far reaching impact.

  7. Cloud Says:

    We didn’t qualify for a stimulus check which tells you that we’re very fortunate indeed right now – and we know it. Both of us work at companies that are not losing business due to the pandemic. In fact, my husband’s company is gaining business. I am a bit concerned about what happens to my company a few years down the road when pharma and biotech companies start suffering from the fact that a lot of clinical trials are getting canceled or put on hold right now, but that will take several years to show up in my company’s prospects so I figure we’ll deal with that then.

    So anyway, we’re trying to do our part to spread that good fortune around. My husband’s company is running a match on some donations, and we’ve donated to the food bank twice via that. We’ve also donated to our local relief fund and a fund working to help undocumented immigrants. We’ve also bought some clothes, mostly for the kids because they’re still growing pandemic or no, but also for us. We bought new outdoor chairs from a local patio store. And last night I broke my phone so Best Buy just got some of my money, too (new phone comes today….)

    Both my state and local governments are looking at big cuts because tax revenues are down, including sales tax revenues. So I’ve been trying to shop local. I am finding it really hard to figure out which stores are doing curbside or appointment shopping (the two allowed forms of non-essential retail here right now). Also, a lot of small local stores have really bad websites so it is hard to figure out who has what I need. This week, I wanted to buy some wall hooks to hang by our front door for our masks. I tried finding local boutiques to shop for that but had no luck and ended up ordering on Etsy.

    • nicoleandmaggie Says:

      We’ve also donated to local funds helping undocumented immigrants. They’re definitely an underserved population.

      I hit up Etsy about once a week for facemasks. I’m slowly growing our supply.

      • Revanche @ A Gai Shan Life Says:

        Is there a link to those local funds that would be safe to share (here or privately through email)? I’d like to add them to my list for future donations budgeting.

      • nicoleandmaggie Says:

        Ours are *very* local (county level). You can probably find an equally worthy cause by contacting any local Democratic Party office and asking about local groups that support immigrants. (We got our info off our local party newsletter.)

    • Leah Says:

      Facebook has been helpful for me in navigating ordering curbside from local stores. Of course, you have to know the specific store. Our local chamber of commerce (and the one for the next town over, which I’ve also liked on Facebook) has a website with a list of everyone doing curbside stuff, so that helps too.

      My hard part is figuring out *where* to buy specific items. I’ve done a lot of asking on facebook to see where I can buy things locally I might otherwise order.

  8. Debbie M Says:

    I saved half (my boyfriend is still underemployed) and donated half.

    I sent $100 to an unemployed friend for medicine (or whatever she prioritizes).

    I offered $200 to my mom to help pay for storage for the stuff she packed when she was about to sell the house but then the market went through. She has a small pension and usually gets temp work in the spring but did not this year. She said she’s actually fine and asked me to send it to a food bank instead, so I did. I actually sent it to the San Antonio food bank, because a friend living there said their residents are poorer than Austin’s.

    The other $300 went to the CDC Fund. I was hoping it would get us closer to actually fixing the problem rather than just bandaging the symptoms.

    You do make a good point about food and kids, though. I’d heard that aid to women tended to have more results than aid to men because they tend to share it with the whole family, but I hadn’t heard that helping kids helps the most.

    As far as spending my money, I’m still trying not to spend much. But whereas before I was taking us out to eat because my boyfriend loves eating out and can’t really afford to takes us right now, I am now also doing it to support local restaurants. I am also tempted to support La Madeleine.

    I bought some books from Powell’s. And I have financed a game on Kickstarter.

    As for groceries, I feel like I should go to my local food coop, but it’s so expensive. So mostly I go to a local chain (HEB) and a pretty big chain (Trader Joe’s). Trader Joe’s is doing a much better job, and their customers are better at following the rules, so I’m trying to get most things from them more.

  9. bogart Says:

    So, this was to be a year when I gave to political (non-tax-deductible) causes, and odd-numbered years, for bunching deductible contributions (useful because of the new tax law). And, count me among those uncertain about my family’s future, despite being comparatively fortunate. So for now the money is mostly stashed (I do make small contributions to some local causes, mostly around food and kids) and we are cutting discretionary spending (which is pretty straightforward giving constraints that have been imposed and/or that we are choosing — no meals out, no travel, limited use of vehicles), though also spending on some things we didn’t previously (grocery deliveries with generous tips).

    I’ll probably still give to political causes I want to support, but for now am sitting mostly tight. I both feel bad about this, and also aware that there will be plenty of need next year (and beyond) as well.

    • nicoleandmaggie Says:

      You can always DO political stuff– it costs less but is really important!

      • bogart Says:

        Yes, good point. Though I am pretty busy — working what feels like 1.5 time (I have gotten roped into helping develop a bunch of unusual summer programming to “help students stay connected,” something my institution is freaking the heck out about which, fair enough), managing kid school, trying to get out (away from others) and stay sane. But I have been writing postcards to voters and the last 2 times I asked for addresses they couldn’t send me any, so that’s — good? But I will keep checking. And I do realize there are other things I can be doing (also continuing to use resistbot, etc.)

  10. First Gen American Says:

    I didn’t get a check but my mom did. The same week we got the check 2 teeth had to be pulled so more than 1/2 went to unplanned dental expenses.

    I’ve been buying gift cards at the checkout line and handing them to the cashiers and saying thank you.

    We have a matching fund thing at work for Covid donations but I don’t know how to process the Match so haven’t gotten around to that yet.

    I am like a bunch of other folks scaling back on nonessential spending as I don’t know if our jobs are at risk yet, so right now house projects are on hold and keeping more cash on hand than normal.

  11. becca Says:

    I appreciate the added detail and all the ideas!
    Here’s what I did so far:
    *Tires for my car. Not glamorous or probably particularly good stimulus, but definitely on my own hierarchy of needs.
    *Feeding America donation
    *Masks for my family
    *Donation to fund for masks for healthcare workers (this should totally not need to be A Thing, but my Lake Michigan Credit Union made it super easy to donate to)
    *Money to Marketplace (the American public media radio/podcast people)
    *stamps (PSA: the T rex stamps are much cooler in person and even have a holographic dealio going on!), more as a random extra cash flow to USPS than with specific activism plans, but I may do both
    *Scholastic book fair online
    *Girl Scout cookies (ordered online)

    I still have a bit that I’ve mentally earmarked as kid spending, since that’s how it came in.

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