QUOTE(Eva Destruction @ Sat 10th April 2010, 4:33pm)
![*](style_images/brack/post_snapback.gif)
QUOTE(Ottava @ Sun 11th April 2010, 12:26am)
![*](style_images/brack/post_snapback.gif)
QUOTE(CharlotteWebb @ Sat 10th April 2010, 11:22pm)
![*](style_images/brack/post_snapback.gif)
QUOTE(A Horse With No Name @ Sat 10th April 2010, 11:11pm)
![*](style_images/brack/post_snapback.gif)
I am also available to discuss Keynesian economics, too.
![wink.gif](http://wikipediareview.com/smilys0b23ax56/default/wink.gif)
Alright, let's start with the brick-through-your-windshield fallacy.
Actually, a 19th century Polish (I think Polish) economist disproved it. Back then, it was the "broken windowpane" idea. He argued that if you broke all the windows, what you did was give the glassier more income but it took away from everything else and forced people to buy something they didn't need, thus hurting other businesses and taking away from the amount of goods people have (so a big drain on the economy). : )
But the glazier then spends his extra money in the local businesses so assuming a closed economy the net loss/gain is zero and all that's happened is a redistribution, no?
No, since
Frederic Bastiat pointed out that the $ the glassier spends on himself and the businesses he patronizes, is exactly the extra amount the window owner would have spent at other businesses, had he not had to buy a new window. It's a different SET of businesses, of course. The window owner, instead of a new window, might have bought a suit with that money, which would employ the tailor, who employs the weaver, who employs the cotton and flax grower, etc. The glassier employs the charcoal maker, the soda miner, the kilnmaker, etc. You might think the economy is net-unaffected either way, but in one scenario the window owner ends up with a new suit, and the other, he doesn't! So it's really true that destoying things that it takes a lot of people time and energy to make, lowers the standard of living.
This is the key reason why going to war (unless, Roman-style you manage to scavenge more booty from the conquered than you spend on armies and materiel) is NOT good for a nation's economy. Nor, generally, is government spending to do this-and-that. Even if the government builds nice things like museums and baseball stadiums, it only means taxpayers have less money to go to restaurants and movies; So the net effect is zero. Jobs are moved from private to public sector, and perhaps to some extent from one state to another (if it's a federal project) but the net jobs created is zip. In fact, quality of life may drop, inasmuch as the government is generally not as good a businessperson as the private entities which would otherwise decide if this or that stadium or museum is going to be a dinosaur that loses money year after year (answer, usually: yes)
Possible exceptions are government spending on infrastructure which would be prohibitively expensive privately (due mostly to eminent domain problems and efficiencies, and differences in red-tape). It may also be that government can stimulate an economy by spending money on research which private corporations would not undertake due to limited patent duration (where the government can take a longer view of payoff). National defence may also have long term economic payoffs that are difficult to quantify (in terms of attacks prevented, etc).
However, in general, most "jobs creation bills" are crap. Even the best of them that spend only on infrastructure and research, do so with a "leaky bucket," where only some fraction of every tax dollar actually goes to construction companies and science projects, and more is skimmed by administration than would happen privately. And if it's not spent on those things, then an economy really suffers, since jobs in beaurocracy and building stuff nobody really wants very much, take away money that that people otherwise would have spent on things they needed far more badly, and which would have created just as many jobs to provide (or destroyed if they were not provided). Like better food, housing, medical care....