It's Consumers That Help the Economy -- Not Businesses
I mentioned before the idea of giving incentives for consumers to go out and buy things thereby boosting sales for businesses. I continue to feel this would the best and quickest way to get the money rolling again in our country and others.
Just sit back and think about it folks. What causes you to go to a specific store or company to buy something (other than the immediate need for something)? A discount, rebate or coupon - saving money on something you desire of course.
Why would somebody cross town to buy a lawnmower when there's a store down the road from them that sells them? Why would somebody travel to another city for an item when that same item can be found at the local department store? To save money - that's why.
Consumers will buy if they think they are getting a great deal, if they trust the store's return policy and if the quality of their merchandise is good.
How many times have you walked into the market store to see an item that normally sells for $2.99 suddenly marked down to a $1.99 or you see that item being listed as, "buy one, get one free"? You ever wonder to yourself, how can they afford to take such a cut to their business? Well folks, it's either because they normally make about a 60% profit from the $2.99 original marked price or they are overstocked and need to get the item sold or lose money because they have to throw it out in a few days. Most likely the reason is, they want to attract more customers so they are willing to take a temporary cut in profits of that item for better ones later. In the long run, they make more money because more customers come to buy that item and while at the store, end up buying even more things.
So, going back to fixing our economy or at least helping it improve, if companies and businesses want to get better results (get consumers out buying their products) they need to start taking some hits (loss of income) in the short run to improve things for their future.
How can the government help? Going after credit cards, backing up products like they are the GM cars and trucks, offering huge discounts like a few thousand dollars off the purchase of a car to get old clunkers (gas guzzler, environment danger) off the road is a very good start. However, the faster way to get consumers buying again would be to offer discounts, coupons and rebates for buying everyday items like food, televisions, computers, computer games, videos, toys, clothes, car equipment/supplies, yard equipment, swimming pools, furniture, etc...
While most of these items discounts should be handled by the company and them taking the temporary loss in revenue aiming for larger future revenues; government could offer rebates for bigger items, items that cost more than say $150.
Rebates would be the best way to do it because it forces the consumer to buy the item at regular price (giving the company their money) and if the consumer wants that rebate back they have to follow the steps listed on the rebate paperwork (fill out the cards/application, look up the model numbers, serial numbers, date of purchase, where it was bought, etc...) and mail the request in.
I don't know about the rest of you but a lot of times I don't even bother doing all that unless the rebate is $25 or more. So, because of people like me, a lot of money will never be spent giving rebates back to consumers yet the company got that new business anyway because of the rebate offer.
As for those that do send in the documentation, well think about it folks. How much money is our government spending right now trying to keep companies and businesses afloat? Billions are being given away to companies that may never revive themselves - that's money going down the drain.
On the other hand, if that same company made a profit from new sales because the government offered rebates to the consumers, the consumer is happy, the company survives and government (taxpayers) saves money in the long run.
Let's say the government is currently giving GM $1000 per car bailout money. The car if it had been sold would have given the company a $5,000 profit (but the car continues to sit on the lot - not selling because consumers have no incentive to go and buy it).
Now, let's say the government offers the consumer instead of GM, a $800 rebate for buying that same car. First off, the government just saved $200 and GM just made that $5000 profit helping them to stay afloat. To top that off, unless the consumer fills out the paperwork, they may not even send in the rebate request, saving the government (taxpayers) even more money.
Simple logic, if we're going to spend money to help a company, it's best to spend it on consumers instead of companies because it's consumers that make the world go around - sort of speak.












