Your own personal stimulus program

If you’re asking, as John F. Kennedy once suggested, what you can do for your country in this less-than-wonderful economy, here’s an answer you might not have expected: treat yourself to a spa day. It will do more than you, or at least I, imagined:

One of the best ways to stimulate the economy yourself is to spend money on personal services, according to Dean Baker, founder of the Center for Economic Policy Research. “Personal services” is finance code for manicures and pedicures, facials, babysitters, lawn care, and dog groomers. Apparently, this is a more efficient and effective form of consumerism, for yourself and the economy as a whole. Service industries generally have low overhead and spend more of their revenue on paying staff than a typical store. They are also often locally owned, keeping your dollars not just within the country’s borders, but in your own community.

For example:

Let’s say you spend $100 on one of those exfoliating facials at your local spa. (Your pores don’t clean themselves just because it’s a recession, you know.) Your esthetician pockets most of that amount — $90 — and then uses it to pay for a hair cut at a local salon. The stylist then takes most of that money — $80 — to pay the dogwalker. Your initial $100 expenditure has actually resulted in $270 in consumer spending right there in your neighborhood. And the chain continues down to the last cent.

The key is distribution. Ultimately, any time you spend money, you are helping to boost the global economy. But in this scenario, your money circulates within a defined area. It spurs economic activity in your neighborhood and directly employs people that you know.

Of course, if you look at this and wonder “Someone gets eighty bucks to walk dogs?” you’re probably not the sort who would toss a Benjamin on a spa day, either.

(Found in Virginia Postrel’s sidebar.)


  1. Lisa Paul »

    7 June 2009 · 5:51 pm

    And can we mention buying locally grown food and plant products, especially from small producers who tend to farm organically or at least sustainably. Then your dollars circulate locally and also contribute to keeping green space.

    But WTF on $80 for a dog walker? That’s more than the going rate for a week’s worth of dog walks in San Francisco.

  2. fillyjonk »

    7 June 2009 · 6:20 pm

    Wow, I must be a bad, bad person: I mow my own lawn, clean my own house, don’t get my nails done, and take care of my skin with stuff I whip up in my own kitchen. Perhaps I am the one to blame for this recession.

  3. CGHill »

    7 June 2009 · 7:02 pm

    Actually, it’s my fault. I’ve cut my discretionary spending by rather a lot, in an effort to keep my debt load from rising further, and the whole world is suffering as a result.

    (Stimulus funds may be sent directly to me. Address on request.)

  4. Lynn »

    8 June 2009 · 4:57 pm

    I’m still stuck back there on $90 for a haircut.

  5. CGHill »

    8 June 2009 · 5:53 pm

    It’s about five times what I spend, but then I am not exactly overendowed with hair.

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