Op-Ed: Joe, Betsy Sue and the Army Band learn about stimulus.

One day in the happy Kingdom of More Moola, Joe the pizza maker decided to make some extra pizzas, counting on the lunch shift at the local widget factory to buy up all that he had made.

Unfortunately Joe had not heard the news yet and did not realize that there had been a down turn in the widget business and the factory had been forced to lay off several workers. Even worse, Mr. Sluggo, the factory owner had told the remaining workers that if business did not pick up soon he was afraid that he might have to lay off several more of them. This was very bad news for Joe, particularly since the remaining workers, fearing a layoff, were not spending any more money than they had to. So, instead of eating Joe’s wonderful pizzas they were all bringing baloney sandwiches from home. Joe’s pizza parlor was experiencing a recession which means that he had a greater supply of product (pizzas) than there was demand for (pizza eaters). To make matters worse, Joe was hoping for the money from the pizzas to pay his rent, so if he did not sell his pizzas today he faced eviction. He told his waitress Betsy Sue that he could not afford to pay her for today and sent her home in tears. Now Betsy Sue had no money either. The king heard of Joe’s troubles and, being a kindly fellow, he decided to give Joe and the owner of the widget factory a tax cut. Since he was so generous he also decided to give all the workers who still had jobs tax cuts as well. This was a very nice idea but unfortunately tax cuts take time to work and Joe’s pizzas were growing stale. If he did not sell them soon he would lose his business and then the tax cut would not matter since he would not be paying taxes anyway. Disaster loomed. But the Queen was wiser than the king so she sent a bus over to Joe’s pizza parlor containing the Royal Army Marching Band. It was lunch time and the band members were hungry but that was no problem since the officer in charge had been given a credit card by the Queen with which to buy pizza for the band. The band loved pizza and the tuba player could eat an entire one all by himself, so Joe quickly sold out of all the pizzas he had made and even had to make some more. Business was so good and Joe was so busy waiting on the band that he called Betsy Sue’s place and told her to hurry in to help with the rush. Joe was saved and even Betsy Sue now had some money. Now Betsy Sue’s passion was for widgets, of which she had a very large collection so, with her wages from the government money she received for serving the band she was now able to treat herself to a brand new widget for her collection. This meant that Mr. Sluggo, the owner of the widget factory, seeing his business pick up, was able to call back all the laid off workers, who were now able to buy Joe’s pizzas again. Business was so good that Joe had to hire Betsy Sue full time to help with the rush. This gave her more money for her widget collection which gave the widget workers more money to buy pizza and the wheels of comerence went round and round. The economy had been restored and everyone was happy. So boys and girls, what have we learned today? Well we have learned that a recession is when there is more supply in an economy (in these case pizzas) then there is demand (pizza eaters). When that happens the first thing that a business does, in order to lower overhead, is to lay off workers. Now the workers no longer have any income and even those who still have a job are afraid to spend money for fear of losing their job and needing to live on their savings. That in turn throws more people out of work and the effect ripples through the economy. Tax cuts help, but they are slow. By the time they take effect companies could have gone out of business and workers may have lost their jobs, in which case neither of them are going to see any tax cuts any way since they are no longer paying taxes. Investing in more pizza parlors will not help the economy if no one can afford to buy the pizzas already on hand. However the government can work exactly like any other customer by buying goods and services on the economy and they can put these purchases on their credit card--that is run a deficit just like any other consumer since they know that they will be able to pay the credit card charges with their increased revenues from the taxes paid by all the workers and factory owners who now have jobs making the things that the government, and other customers, buy. And that boys and girls is how a stimulus package works.