Spain has a lottery: El Gordo. A big, expensive, once-a-year, lottery, that nearly everyone plays.
It works a little bit differently than lotteries in America. Tickets have a small sequence of numbers. All tickets with a specific number are sent to wholesalers who sell them retail. When the winning number is pulled, there are many winning tickets: 1,800 tickets this year, each worth about $520,000.
This year, in a village of 70 households and 250 people, every person but one held a winning ticket.
This is a natural experiment in Keynesian fiscal policy.
Recall the Keynesian fiscal policy story: you dump purchasing power on people, and let the multiplier process spread the wealth. Typically, the government buys something, but you could view the government as buying back peoples’ lottery tickets in this case. Also recall, that in the Keynesian story, what the money is spent on is irrelevant. What’s important is that it is spent.
There has already been a short-term stimulating effect:
The only resident who did not win was Costis Mitsotakis, a Greek filmmaker, who moved to the village for love of a woman. It did not work out. But he still lives here in a barn he is restoring about half a mile outside the village. Somehow, the homemakers had overlooked him this year as they made the rounds.
Mr. Mitsotakis said it would have been nice to win. But he has benefited nonetheless. He had been trying to sell some land without much success. The day after the lottery a neighbor called to say he would buy it. The next day another neighbor called. But Mr. Mitsotakis refused to get into a bidding war.