The challenge is to make people start their discretionary spending again. There are certain caveats to such an assertion. It is by now clear that discretion of the people should not be solicited by grant of further and cheaper credit to the consumers, because it has been amply evident that credit granted during good times results in deepening of future crisis. Also, faced with uncertain future, presently most people may not want to borrow for the purpose of supporting higher consumption. On the other hand, capacity of the governments is also restricted. The interest rates cannot be reduced further to prompt more spending, and already high level of public debt cannot be allowed to increase further as a matter of rudimentary prudence. Demand for spending on infrastructure, etc., is likely to meet with stiff resistance as it violates the ideological underpinnings of the presently pursued neo-liberal economic policies.

Yet another caveat is born out of the fact that government policies aim not only for higher growth but also for sustainability and promoting ethics. All governments want to build human capital by educating their peoples and augment the number of hard-working and innovative individuals in their society. Governments may want to promote savings and investments in the economy; promote country’s competitiveness, create employment, etc. Governments in Europe may want to address the problems arising out of influx of refugees, or they may want to ensure integration of Europe, etc. It is because of these and similar considerations that governments, generally, do not try to solve their economic problems by promoting gambling, narcotics, prostitution, etc.

If we take a fleeting look at spending patterns of the people, some recognizable patterns can be observed. It is not true that people would spend when offered value. Easiest example of great value is a lottery ticket or winning a jackpot at a casino. One can theoretically win millions by wagering few dollars in both the situations. However, it is known that not many people regularly buy lottery tickets, nor do they regularly visit the casinos.

On the other hand, people generally end up spending few extra dollars when they are given offers that are enticing or tempting. For example, retailing is filled with offers like this: One has to pay list price if one buys, say, a single garment. Discount of say, 15% discount will be offered on purchase of extra garment, and the discount will go up to 25% if one buys at least three garments, etc. Additional prize, say, a cell-phone or a gift voucher is offered if total purchases increase a specified sum. People generally would not buy garments if they don’t need them but such offers would entice them to buy that extra garment when such offers are available. Many more people engage in buying during discount sales as compared to number of people buying lottery tickets or regularly going to casinos.

If the purpose of the government is to augment market demand, the governments can open online lottery houses (such houses can also be run by strictly supervised licensed private companies), where anyone can wager a small amount of money to win some lumpy goods (consumer durables), like a smart-phone, an air-conditioner, a car, or a house. People can be expected to wager a small sum to win such prizes. The purpose of the government here is to increase sales of certain items, which, in turn, would provide a fillip to overall economic activity in the country. The government does this by opening an additional channel for sales of goods. It is, therefore, important that government do not allow cash prizes for lottery but only offer goods.

The governments can decide not to make money out of the enterprise of lottery but to sell goods at market prices. For example, if a car is valued at, say $40,000 and people are offered lottery ticket of $100, governments can offer to sell not more than 400 tickets (or 450 tickets, to cover administrative expenses) before holding a draw and allot the car to the winner.

If we make a reasonable assumption that for every person willing and able to buy a car of $ 40,000/- there will be more than 400 people willing and able to buy a lottery ticket of $ 100, the overall demand should increase. Even when a person willing and able to buy that car wins such a lottery (replaces market demand), she would have extra resources, much of which will be spent on other items, thereby increasing overall demand in the economy. Government, since it offers goods and not money in lottery, will be promoting economic activity to the extent that sale of such goods would promote economic activity in the economy. Such an arrangement would have further additional benefits. It will provide an additional revenue generating source for the governments – governments do tax lottery winnings; and it would increase consumption without any expansion of credit.

Such an initiative will be malleable enough to can help serve various government objectives. For example, if the governments want to address environmental concerns, they can offer only goods that are produced by using say, 25% solar energy through the proposed sales channel. If the governments want to promote efficiency, it can prescribe that goods of only exacting quality standards can be offered through this lottery channel. Countries like Germany that support large number of refugees can allow good produced (say houses built) by employing certain percentage of refugees in the labor force to be offered at such lottery centers. Or, the money earned by lottery centers can be used for supporting refugees. One of the aims of Government of India is to promote manufacturing in the country. This is expected to provide large-scale employment to burgeoning masses in India. Because of agreements signed at multi-lateral organizations, government cannot change tax and duty structure to promote certain brands on the basis of quality or efficiency, but opening of lottery centers would provide government with an additional tool of providing additional market to the preferred products. For example, government can rule that only the products meeting prescribed quality standards and manufactured within the country – even by foreign companies – can be offered through the proposed lottery centers. Thus the lottery centers can be seen as avenues to generate auxiliary demand. Such an additional market for the product could be used to generate local employment opportunities, as also to attract foreign investments, which brings in not only the funds but also know-how and latest technology in the country.

Obviously such a scheme would need checks and balances against governments without regard to overheating economy continues to pursue populist policies or selling sub-standard goods, but a wider debate should decide sufficient level of such checks and balances.