Does the Lottery Help or Hurt the Economy?
I don’t know about you, but it never occurred to me that playing the lottery could help (or hurt) the economy. I may be naïve but I just though the money that we (the lotto players) put in is what we would win. Of course, minus fees and what not. It would make sense, wouldn’t it? Well, according to a variety of people, it seems that the lottery could do more harm than good.
One statistic states that Americans spend about $65.5 billion on lottery tickets and those numbers only seem to increase every year. With that being said, only 25% of the proceeds of the ticket purchases go toward state governments. That 25% goes toward schools, construction projects and even programs to help lottery and gambling addicts.
It is believed that the states would get more income if people bought goods and services rather than purchase lottery tickets. Victor Matheson, an economics professor at the College of the Holy Cross told CNN: “People spend disposable income on lottery tickets rather than buying a coffee at Starbucks or some gizmo at Best Buy,”
Well, of course! You don’t have the chance of winning thousands or even millions of dollars by ordering a coffee drink or playing with the latest technological gadget. People play the lottery because there is a chance of winning.
Okay, Am I For or Against the Lottery?
I can see it from both angles. One side, the billions that are spent on lotteries could be better used for helping various public services. Schools need funding, roads need to be repaired, and there are plenty of programs to help the citizens with the things they need. That 25% from the lottery does a lot more than the small percentages of taxes that comes from services and goods. On the flip side though, billions of dollars are being spent on the lottery, but the money could go to help support businesses and services.
For example, as Lynn Reaser from Point Loma Nazarene University, stated: “The winner might spend a significant share of the payout on “big ticket” items, including a car, house or vacation. There will thus be winners and losers in terms of both individuals and businesses, but no net gain. Perhaps the only economic benefit is a brief euphoria and diversion for many Americans. The downside is a sense that there is an economic “free lunch.”
Either way you look at it, the lottery brings in a lot of money and the revenue does more good for the public than the taxes from purchases made at stores and restaurants. Maybe people who are already strapped for cash are making poor decisions by wasting their money on the lottery, which have very slim odds of winning, but who are we to say how they should spend their money? I may not be an economist, but in my little brain, the lottery helps the community.
