Penny for Your Thoughts
I’m suspicious when the government sends out arbitrary amounts of money to people in hopes of “stimulating” the economy. But what about sending cash for some other reason? I don’t have a problem with this, although the recipient of $5 quoted in the article sounds pretty mad:
The letter claimed to be from the Department of Transportation and said the $5 was an incentive for personal information about driving habits.
And while it looks like a scam, the DOT says it’s not. [...]
“When you called me back and told me it wasn’t a scam, I got even angrier. For the government to spend this kind of money on a mailer like this just infuriated me even more,” Held said.
Sending out cash with a survey could be worth it. The five-dollar bill grabs the recipient’s attention and makes him or her feel somewhat obligated to respond. And while this gimmick may sound expensive, mailing a survey that no one replies to would itself be a waste of money. Making decisions without information is costly too.
It would be interesting to find out whether a one-dollar bill is as effective in eliciting responses. If so, switching to the lower denomination might be a way to keep expenses down. Anyone at MoDOT want to give it a try?
I remember a few years ago I asked a number of people before I got a satisfactory answer “How exactly does the government inflate the currency?” I knew they had the printing presses, but I didn’t know the mechanism whereby the money enters the hands of people outside the government. Since then I’ve learned about the Fed, and Monetizing the Debt, and I know that the spending mentioned in this article has a VERY small overall effect, but it represents just one more potential road for government inflation.
You make good points about the value of information, and I realize that, if done properly, this survey has cost saving potential(thus increasing government efficiency[??]), but inflation was my first thought upon reading this. (Dropping money out of a blimp would be too obvious)
Comment by Josh Smith — December 18, 2008 @ 3:54 p.m.
True, but any deficit spending has that potential.
Comment by Sarah Brodsky — December 18, 2008 @ 4:21 p.m.
“The Federal Government really is sending out 31,000 $5 bills randomly across America.
Ian Grossman says the $20 million survey helps determine a $40 billion budget.”
31,000 X $5 = $155,000
where does the other $19,845,000 go? Ian’s pocket?
Comment by vroman — December 18, 2008 @ 9:00 p.m.
It probably goes to planning, implementing and interpreting this data gathering exercise.
Comment by Josh Smith — December 19, 2008 @ 10:20 a.m.
I think he means that the results of the survey will be used as justification for allocating the much larger budget in the service of a set of specific data-driven uses.
If not enough people respond, they won’t have enough data to know how to direct the budget resources in the “right” ways, so they’re trying to create more of an incentive for people to answer the questions.
Comment by Eric D. Dixon — December 19, 2008 @ 11:41 a.m.
While money is a great incentive, it seems more like pork barrel government waste. The mechanics of such a small compensation giveaway is a money pit. How about instead put the money in keeping more of the motorist assistance on the roads, more salt for the winter or fix a few darn potholes. The media and the internet give enough voice through free public discourse to avoid having my tax dollars throw away paying for survey staffing, mailing costs and other costs associated with it.
If you want to give something away do a random free toll or do a roll back day on fuel taxes things which have minimal mechanical costs.
Comment by Michele Whiting — December 21, 2008 @ 4:57 p.m.