When I read of all the millions involved in political campaigns I wonder what effect it is having on the economy. I almost see it as wasted resource, but know there’s more to it than that.
Whether from private individuals or organizations, this has got to have an impact somewhere. Where does it come from? Where does it go? Does it prop up advertising, venues, local businesses in a large way? Has it become a key part of our national economy?
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A lot of money is spent on political campaigns, and when it is spent it moves through the economy and supports other people and businesses.
Where does it come from?
Ultimately it all comes from people. Some of those are “normal” people making small contributions (from a few dollars to a few hundred). Others are wealthy people giving very large donations (thousands or tens of thousands).
Sometimes people give money to another group (a PAC) that collects money and sends it to candidates or spends it in support of a candidate. And sometimes, very rich people write ginormous checks to groups called Super PACs (which have no limits on how much they can take from an individual), and those Super PACs run their own campaigns.
Where does it go? A lot of places.
A ton of money is spent on advertising – TV, radio, social media, direct mail pieces. The money ultimately ends up with the company offering the advertising (i.e. the TV station or the social media company), but there’s usually a company (consultant) that gets paid some money to coordinate all this.
It’s also spent to hire people – from top campaign staff who make a lot of money to low level staff who make a little (field organizers, door knockers, phone callers).
Some of it goes to restaurants and catering halls. Fundraising often means hosting events, and there’s a cost associated with that food and drink.
Some of it goes to other small businesses (or large businesses) that make things like lawn signs, postcards, tshirts, etc.
Some businesses rely on this money a lot – others don’t.
Is it a key part of the national economy?
It’s a drop in the bucket in the big picture. We spend billions on political campaigns, and the national economy is worth trillions. So you’re talking about a tenth of a percent.
To the people involved in the campaigns (the staff, the consultants, the businesses that support them), it can matter a lot. If we stopped spending money on elections overnight, there would be people out of work and businesses that had to close. But it probably wouldn’t trigger some kind of massive economic crisis.
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