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The Broken Window Fallacy
A reminder that destruction does not create wealth, it destroys it.
Paul and his followers are wrong... again.
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Ah my home and native land. I like your premier, seems like he's constantly suckling on a greased pig and has the stench of deceit running down his chin. That sounds like a great re-distribution of wealth program which is the typical setiment that people are missing. The government takes money from the individuals and re-distributes to the corporation. The corporation in turn, turns their backs on their local community and outsources all manufacturing and labor to the lowest bidder. The lowest bidder in foreign lands mistreat the labor force and environment so they can turn out a low price piece of trash. That gets sold back to the people who had the money taken from them (consumers/taxpayers) then with those mounting profits they bypass local government and incorporate as multinational corps. Thus avoiding taxes. In order to go full circle, the board of these corps sitting in government positions or family members and friends sit on the board and take big pay outs in the form of dividends.
But alas very few of us in North America have the slave labor jobs, we just get robbed in taxes and pay other countries labor costs and support multinational corps.
And if you don't pay your taxes, some big guys with blue suits will drain your bank account dry, show up at your house, take you to jail.
As long as we all go along to get along, Fascism has no counter party risk.
Sometime the glass must be broken.
Live long and prosper Ontario!
Sometime the glass must be broken. +1
A better example would not have used "public works projects". I can see and use bridges and interstates. A better example would have used a government bureaucrat telling me I have to pay $200 for a course to certify me at putting lead paint debris in a plastic bag and disposing of it in the city dump. Now that's a broken window.
Although the video, "Bricks with Dick and Jane," covered the basics, ouch!
BTW, if you can't DO accents, don't DO accents. Mama mia, atsa crappyuh Italianah accentah.
What about broken relationships like 70% of the population being against obamacare but the commie dems still ramming it down our throats? The list is long of course...
Ya' gotta' break a few eggs to make an (insurance cartel) omelette. It ain't easy to put that kind of screw into a whole population and the Dem's fell on their swords to get it done for their patrons and power. They work hard to eviscerate the middle class, grow the lower class, and enrich the upper class all while appearing to support you. Freaking genius they are.
They may ram it down our throats, but we don't have to inhale.
Nancy Pelosi is swallow.
ya gotta' tell GW about this revelation, he has no clue. - Ned
and it's not much of a stimulus if you don't rebuild
next week's headlines: treasury provides 500B to banks in order to encourage lending to communities along the east coast
Liesman at this moment is repeating the "Broken Window Fallacy" in all of its' glory.
CNBS at its' finest.
I didn't imagine that they would attempt it, but they went whole hog along with Maria, but, I repeat myself.
Tylers, get the CNBS from 3:20 Eastern time zone if you want the laugh. They got sorta' wet down there when discussing whether it would grow from the twenty-thousand-million to north of fifty-thousand millions of legal tender non interest bearing notes.
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I do admit trying to jump the queue on the board in order to get the attention of the one of the Tylers so that the rest of we unwashed economic savages get the benefit of Big Thinkers like Steve Liesman and Maria Bartiromo. For that I apologize.
Boris is consider Stimulus for Paul Krugman.
If break face of Paul Krugman, maxiofacial plastic surgeon and ten man surgical team is full employment. Doctor is purchase new refurbishment for luxury yaught and nurse is acquire expensive manicure. Both carpenter and manicurist is pay bills, acquire large screen television display. Employee of power company, and Samsung is pay workers and is buy even more goods and service.
See, is very nice stimulating to economy! So why not break Krugman entire body!?
Boris is smart man. You should leesen to.
~ Vladimir Getchuroxov.
The broken windo fallacy as they call it is outdated. It assumes that the money the shopkeeper uses to replace the window comes comes from discretionary income and will therefore reduce demand in some other area. In the modern world the insurance money is the primary source of the dough so a broken insured window does add to real GDP at the expense of some financial product which doesn't employ anyone. Further suppose that a bank or brokerage sufferes a problem with their building what do they do? Do they fire everyone and liquidate? No. Do they reduce bonuses? No. They put the staff up in temporary digs, buy computer equipment for the temp digs as required and fix the old digs. So that also increases GDP. In result in the modern world insured destructive events that beafall large corporations have the result of forcing said large corporations to take some of the mountains of cash they hoard and put it to work. They don't like it becasue it reduces their cash pile but to say that it doesn't add to GDP for the construction worker and what not is either insanity or more likely obfuscatory propaganda so none of you little men out there get any bad ideas.
I disagree first off a lot of people who build in area's that are prone to disaster do not have private insurance and then
Taxpayers Get Soaked by Government's Flood Insurance
http://abcnews.go.com/Business/Insurance/story?id=94181
Secondly FEMA disaster's also soak Taxpayers.
National Flood Insurance Taxpayer Calculator
Name:
National Flood Insurance Taxpayer Calculator
Cost:
$18,750,000,000*
This analysis looks at what will happen if the taxpayer has to bail out the National Flood Insurance Program. NFIP has had to periodically borrow from the U.S. Treasury to pay flood insurance claims when claims amount to more than annual premiums. The NFIP was once self-supporting, but in 2005 the program incurred approximately $17 billion in flood claims caused by Hurricanes Katrina, Rita, and Wilma. The U.S. Government Accountability Office says FEMA is unlikely to ever pay off its current $18.8 billion debt. In the future, NFIP will likely not be able to meet its interest payments and may have to borrow more to cover future flood losses. Under current law, the funds borrowed by the NFIP from the U.S. Treasury must be repaid with interest.
*Source: U.S. Department of Homeland Security, Federal Emergency Management Agency
Enter Your Gross Annual Income to find out how much you owe herehttp://www.foxnews.com/topics/calculator/national-flood-insurance.htm
Then there are the tax write off's that companies get for losses. Another flaw in your theory is insurance companies and banks oh I know they are evil capitalists but they actually do employ people and furthermore the losses are someone else's assets Insurance company & bank stocks are held by people's pension funds, etc.
I think most people on ZH already realize the government can't create real jobs all they create is a burden to taxpayers if they could create real jobs we would have full employment.
The Broken-Window Fallacy
http://mises.org/daily/5593/The-BrokenWindow-Fallacy
Those "corporate cash piles" aren't already included in GDP? Was that mined by leprechauns? Did the insurance companies, now the primary source of money apparently, get their money from said leprechuans? How can corporations put their "cash piles" to work if they're actually using insurance money? Will billions in payouts not increase premiums and therefore operating costs? How does rebuilding to the previous existing state make up for the production loss in the original event and subsequent time spent on repairs? Even if it's just insurance money (which apparently isn't real money), how does the simple transfer from the insured to the aforementioned construction worker" mean an increase in GDP? Apparently "multipliers" are alive and well and at work fer Muricans as we speak.
The wealth disparity is grearter than it has ever been and people are hoarding. If people who hoard cash are forced to spend some of it, for whatever reason, it puts more money in the real economy than would have been there otherwise as hoarders do not change their consumption patterns irrespective of how much they hoard. True it takes money from the financial economy and if we lived in a perfect world that would be bad. But back to the world we actually live in, the financial economy is drowning in liquidity, sometimes at nominal interest, while the real economy has too little. Also for the uneducated when we paid off the debt from WWII we had this little thing called the retained earnings tax. In those days if a corporation had too much cash they could either pay it in dividends or find some productive use to put it to like build themselves a building or open a new bisiness or anything but "invest" it. It used to be against the law. Then we changed the law for GE to form a financial subsidiary (GMAC) that was allowed to be funded by excess cash from the parent company and that functionally eliminated the tax and started a chain reaction that took all the jobs overseas and strengthened the financial economy at the expense of the real economy. Apple has it's own hedge fund for it's extra cash for example. If those corporations we forced to put that money to productive ventures or pay it in dividends that would increase the real GDP at the expense of nothing. Dividends are charged to retained earnings so there is no earnings effect and money put to new ventures is capitalized. People just don't want to do it because they are hoarders and others, like yourself apparently, have been brainwashed to pretend like the economy of the 1950s and 1960s never existed. Shhhhhhh. Don't look at that economy. It will only confuse you. The laws of physics and economy were different then. Just listen to what I they tell you. It's easier. You never have to read a book or do research. Just relax and listen to what I tell you. Who wants to listen to Dwight Eisenhower anyway. What did he know? He was an old man. Here listen to tootsie roll and her vacuous friends on T.V. talk about economics like they actally know anything. Forget the real world around you. Just listen to what i tell you. It's easier. Just do it.
Boris is like to break more faces to stimulation of economy.
Peter Schiff discusses broken window fallacy http://www.planbeconomics.com/2012/10/30/peter-schiff-and-broken-window-...
Cuz the money has to come from somewhere...