United States presidential election spend ridiculous amounts of money.
Is that amount of spending impactful on the economy as a whole? Do election years lead to a bump in performance, according to whatever metric is used?
Such spending amounts to less than 0.1% of American GDP overall. So while it may have an effect, it must be pretty tiny.
To put it in perspective, that’s less than half the cost of constructing a single TSMC chip foundry in Arizona.
Perhaps what it might do is give a temporary boost to some media outlets, depending on how the money is spent. I wonder if smaller local TV stations, for example, raise their ad rates during election fever? Maybe it depresses sales in other sectors, since those who would be advertising are squeezed out by campaign ads?
Same would go for charter bus and flight companies, sign printers, etc. but that would be peanuts too in the overall economy. And of course, if you are a bus company or supplier of teleprompters, you also have to make sure you get paid.
Isn’t there a whole industry of political operatives and services (Actblue, NGPVan, the Republican equivalents, etc.) who go into overdrive during election years? It’s a political “machine” for a reason, and many fundraisers, campaign organizers, volunteer coordinators, etc. are put to work.
It may not be a lot relative to the overall economy, but for that sector it’s huge.
And of course there’s all the downstream effects of all this bribery. Depending on who wins, tax cuts, subsidies, pork barrels, etc. can change overnight, and entire industries can be made or unmade.
People can no longer fathom how unimaginably rich America is. GDP is currently $29000 billion. The federal government spent $6200 billion in 2023. We spend $64 billion on pet foods and treats. $16 billion is a rounding error. A billion ain’t what it used to be.
Almost nothing by itself has a significant impact on the American economy. Only the collective trends of the hundreds of millions reach that plateau.
As stated, seasonal or special events do have effects on local economies. Campaigns are not the equivalent of Olympics, though. Money is pouring into television advertisements, but that may actually lower revenues.
Candidates also get the benefit of all volume discounts without having to buy in volume – i.e., the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class.
(The totality of spending is much more complicated, as that article makes clear.)
It’s trivially true that spending $16 billion on campaigns means more to the economy than spending $16 million on campaigns. But much of that amount would have been spent on other things if there were no campaigns. More pet treats, for example. Money likes to get spent and doesn’t care what it is spent on. (Fungible is the technical word.) The American economy is like the Atlantic Ocean. Thousands of rivers flow into it, large ones and small. None disturbs sea level.
Thanks for giving me some perspective.
This goes for everything. I was driving past one side of an interstate under repair the other day and wondering how many hundreds of cement trucks it takes to do a few miles of two lane interstate. Or truckloads of asphalt. Or think how many thousands of gallons of diesel to haul that stuff to the middle of nowhere to fix a highway. Or how many farmers there are when you spend an hour driving by farms at 60mph. Or cities that go on for square miles, full of buildings that cost over a million dollars each - and tens of millions or more in the downtown area. One overpass costs millions of dollars - what does one of those massive 3-level interchanges cost? New subway construction in NYC is quoted in billions of dollars per mile…
There are medieval towns in Europe that would fit into the area of a single intersate cloverleaf.
Consider how many people travel every day in any major airport, how many tons of jet fuel are consumed. How many truckloads a day are required to keep our stores full of groceries in a medium-sized city?
HUmans are really bad at grasping the import of numbers. A million dollars is a lot of money. A billion is a million dollars a year for almost 3 years.
And so on… the scale of modern society is staggering.
It goes to show just how wasteful of space and resources we are. We HAVE to be rich to afford that sort of spread-out infrastructure. Like campaign spending, each piece may not be all that expensive, but when you add it all up it becomes real money.