Pump Priming

You’re not the only one who’s feeling blue da ba dee, da ba die...so is the economy. When the economy is in a recession, the government oftentimes will do some pump priming. Like how you get your lawnmower to start working by pumping in some gas before you pull that god-forsaken engine line.

Pump priming is slowly but surely pumping money from the government into the economy. A bunch of tiny stimulus packages, wrapped in pretty bows. In the Keynesian style, spending, spending, spending is always the answer. How to get people to spend more? Give them more to spend. Then the economy should expand again. In theory.

As you could guess, the term “pump priming” is not new. It’s been around since the Great Depression, when Prez FDR did some pump priming to get us out of that recession. Some economists have used pump priming to describe not only stimulus packages (giving money), but also not taking away money, in the form of tax cuts. Another example of this kind of pump priming is unemployment insurance.

Pump priming came back into vogue when the Great Recession of 2008 hit the fan. Lower interest rates, infrastructure spending, and tax rebates were all forms of pump priming. Pump, pump, pump. Pump. Are we there yet? No? Pump.