The Mental Side of the Economic Stimulus

by Tim Brunson DCH

The combination of the collapse of the US housing and credit market, and rapidly rising unemployment has collectively triggered an unhealthy reaction within the masses and our appointed and elected officials. At a time when our higher brain functions should prevail - individually in our leaders and collectively in our populace - we are experiencing an unfortunate tendency to react using our most primitive and inappropriate tendencies.

When accepted and prevailing patterns are threatened our most basic survival instincts arise. Specifically, this engenders three primary reactions. The first is a mental catharsis or tendency toward inaction and nihilism as we show that we are unable to cope with changes. Almost daily we see on the news and financial channels a parade of Congressmen and Senators who offer only criticism of any forward looking action. This is also seen with potential homebuyers and other consumers who insist on sitting on the sidelines while waiting for "somebody to do something." The second is to insist on returning to previously known patterns of action. The insistence that tax cuts and interest rate reductions are the best way to stimulate the economy is a clear example. While these strategies are highly effective in one part of the economic cycle, in deep recessions they rarely show any merit. And then there is the attack response. This includes a frenzy to do anything in desperation to avoid catastrophe. While these reactions may show a modicum of wisdom if they are reframed as prudence, conservatism, or aggressive action, the question remains as to whether they contain sufficient forethought, are truly logical, and have incorporated enough data and research to make truly intellectual decisions. Frankly, as our elected leaders are almost always predictably reactive, I can only hope that this process which we call democracy may in this case lead to our survival and recovery.

Animalistic, baser instincts must give way to higher brain functions if we are to claw our way out of this malaise. Three specific capabilities which we must call upon are logic, parallel thinking, and imagination. As a former college economics instructor and a long-term entrepreneur, I remember my classes on Gross Domestic Products. I impressed upon my students that GDP is the sum of consumption, government spending, investments by businesses, and net exports. In the US economy, consumption normally makes up about 70% of economy. However, as the stress or fear mode has led consumers to withdraw their spending, then fiscal government outlays remains the only option. (The multiplier effect of tax cuts simply plays no role in this phase as there must be sufficient consumer spending to multiply.)

The International Hypnosis Research Institute is a member supported project involving integrative health care specialists from around the world. We provide information and educational resources to clinicians. Dr. Brunson is the author of over 150 self-help and clinical CD's and MP3's.