Economics and string theory – Beside the Point

Sitting in the Fort Madison’s City Council meeting Tuesday night I heard something that made me laugh.

Fort Madison City Manager David Varley has a dry sense of humor. That’s like a good wine to me. It always takes a second to realize that maybe it’s a good wine. I’m a beer guy, so there aren’t very many.

Sometimes it takes me a second to absorb Varley’s humor, but I always appreciate it.

Varley was updating the council on money the city is likely to get in the next 75 days from the American Recovery Plan that was signed on March 11 by President Joe Biden.

Varley said there was some good news – that the “Saddle America’s Kids with Insurmountable Debt…, I mean the last stimulus bill, sorry.”

I belly laughed behind my double mask.

I let the comment steep a little as Varley went on to say that thanks to the U.S. Senate, Fort Madison would be getting about $1.43 million, $200,000 more than Keokuk and about $1.3 million more than West Point.

The $1.9 trillion in stimulus money approved in March is a tremendous amount of money and it will saddle Americans with debt for decades – if not generations.

I’m not convinced that we need to spend that much money. But it’s law. So now, what’s the best way to move forward?

Let’s just say here, loud and clear, the money being given to local governments, (Lee County got $6.5 million) cannot be spent on any tax relief, including debt relief. Initial interpretations say the money can be used for water, sewer, and broadband, but also for revenues lost due to the pandemic.

Well, that’s a little obtuse in my mind. Creative governments will find a way to show a loss of revenue attributable to COVID.

Supervisor Garry Seyb, Jr., asked the county to form a committee to digest all the incoming proposals for using the money, and then suggested possibly hiring a grant writer. Grant writers wouldn’t technically be a viable use of funds, but the county could spend the money regardless in hopes the position pays for itself.

I spoke with a banker over the weekend who told me the $1.9 trillion spend is law. The taxpayers are going to have pay for it now. So the second round of Paycheck Protection Program loans, extended unemployment, school funding, etc. are in play and people should use them as intended.

But is it too much? Yeah.

And I’m not conservative, although I see the points of conservative people more and more as I get older. My liberal wife and daughter keep me rooted a little.

But this is too much. I remember hearing economics teachers talk about the dangers of devaluing the dollar. It just means you need more to buy less. I liken this to the same thing.

I saw a cartoon the other day where the Unemployment window had a line backed up, but the window next to it said Now Hiring and no one was in line. That’s real. People are making more staying at home and many choose not to go back to work. That will last right until the benefits run out. We have jobs. We have people. We have unemployment?

But I also get the value of using the stimulus money to purchase things you need – maybe things you want. That’s what’s happening with local governments. You have to spend it in the economy. I would assume, and I know as much about economics as I do about string theory, that those spends will act like solid rocket fuel for America’s economy. But we also know the dangers of solid rocket fuel.

I don’t know – but I agree with the banker. It’s a law now, so let’s use it the best we can for our families, schools, customers, and constituents.

The best formula is for all the unemployed to realize this is a chance to REALLY get back on their feet. Get out there and get back to work. There are companies in this county that need your help. They are good jobs with good benefits. You just have to get past sitting at home and seeing money drop into your account. It won’t be there forever, but here’s a chance to use it as a springboard to even better things.

Speaking of springboards, what a start to the year economically for the city. I think I have taken pictures at about six ribbon cuttings this year already. Mark Holtkamp is going to double the size of The Madison and Glen Meller is cleaning up some property on the west end. Throw in activity at Farm & Home, there’s some rumor that Matt Mohrfeld might have an idea about a marina…or something, and you got some real good energy happening.

If we can get this coronavirus off our backs, it could be a very interesting couple of years in Fort Madison. But that’s Beside the Point.

3 thoughts on “Economics and string theory – Beside the Point

  1. I haven’t heard of any Trumpsters refusing to cash stimulus checks. Maybe if Biden put his name on all checks as Trump did they would refuse the money!!

  2. Reminds me of an old saying: If you weren’t a liberal when you were young, you didn’t have a heart. If you’re not a conservative by the time you get older, you don’t have a brain. I think I’m somewhere in the middle – which means, even with my half a brain, I can see that this $2 trillion boondoggle sets another dangerous precedent. Case in point, all of this increased economic activity in Ft. Madison has been happening without benefit of this new infusion of our grandkids’ future tax dollars.

    The point is well taken that this is now law, so despite the recklessness of it, decisions need to be made. But due to the fact that several states are challenging the constitutionality of the feds’ setting restrictions on the states receiving these funds, maybe Ft. Madison should take a wait and see attitude. If those challenges succeed, the city might be free to apply these funds toward debt and/or tax relief rather than finding yet another new project to fund.

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