Small-town solutions to the economic crisis

I realize Lodi isn’t a small town anymore, and really hasn’t been for a long time. In the current times, though, we have something in common with a lot of small towns: Many Lodi folks have been struggling due to the poor economy.

There’s a pretty interesting blog entry over at Yahoo! News, though, that talks about the solution a couple of small towns and even Detroit have hit on to help stimulate the local economy:

In Colorado, the tiny town of Lamar (pop. 8,500) is paying its citizens to shop locally. People who spend $300 get a $30 gift certificate good at any store in town. In the market for some new (or used) wheels? Buy a car and get $100 worth of gas. Ron Stock, the town’s administrator, told CNN that he got the inspiration for the incentive plan from a time when folks were going through a similar experience:

“I really looked back at what cities had done during the Great Depression,” he says. “I saw that cash had sometimes been very tight and cities had issued scrip to keep the economy going.”

So what’s scrip? It’s a purely local currency, sort of like the money that Emperor Norton I issued in San Francisco. Essentially, everyone in town decides that it can be accepted as money, and it’s backed by the local government rather than the federal government. Scrip can also include things like the “gift bucks” you can get at some fast food chains and grocery stores.

According to the blog entry, local scrip was sold during the Great Depression at a discount; people could buy, for example, $30 worth of scrip for $25, but the scrip they purchased was worth the full $30. It was great for struggling towns, too, because it could only be used at local businesses, meaning that residents saved money and local shops got more customers since scrip couldn’t be used out of town.

If the economy is shaky for much longer, this might be a great way for Lodi to boost business to places like Downtown. Even if it’s just with “Lodi Bucks” gift cards given out after a certain number of purchases, to utility district customers or even sold at a discount, this would get money flowing back into local pockets and produce more local sales tax — and we wouldn’t have to wait to see if the stimulus package passed by Congress works, or for the money requested by Rep. McNerney to come through.