More broken windows, my good man.
No windows were broken in the signing of the ARRA. The multiplier on the stimulus was positive- ie, more goods and services were produced than otherwise would be. In many cases there was actually a crowding in of private investment.
It’s still nice to have job, though.
Of course it is nice for the individual who has the job. But it is not very nice for the people who he parasitically feeds upon.
Also, it is not very nice for the person who lost his job in order to give the parasite a job.
The thing is, all jobs created by the govt are parasitic jobs, meaning nobody would actually hire the parasite unless forced to by the govt. And after all, all govt jobs are forced upon the populace.
It is only private sector jovs that are productive. Proof: somebody wants the guy to do the work, so much so that he is actually willing to voluntarily pay for it.
Many of these “non-productive” jobs were created in infrastructure, research, and education.
All areas where the govt has intruded large scale, and made such a horiffic mess that everyone recognizes them as disasters. Naturally, the only solution the govt understands is to pour still more money into these white elephants. They then brag about how the parasitic stimulus “improved” things.
Roads used to be private, and they functioned very well.
Research used to be pvt, and great things were discovered.
Education used to be private, and the literacy rate was 95% [as opposed to about half that now].
Are you sure about that?
The US literacy rate is… well above 50%.
The problem comes when the financial system is hamstrung and funds aren’t able to get funneled into productive use. In that instance, building roads and schools with public funds can crowd in more private investment.
The kicker is that a large part of the ARRA was composed of tax cuts. I don’t know how an Austrian can object to that.
The problem comes when the financial system is hamstrung and funds aren’t able to get funneled into productive use.
Not sure what this means. Right now money isn’t funneled into productive use because the govt is borrowing it, crowding out the privare sector from accessto loans.
In that instance, building roads and schools with public funds can crowd in more private investment.
Not sur ehow this works. The govt builds a road a road or a school, hiring people who should not be hired. Why does the private sector then hire anyone?
The kicker is that a large part of the ARRA was composed of tax cuts. I don’t know how an Austrian can object to that.
Tax cuts are fine, but the govt doesn’t get money from tax cuts, and they cannot hire Mr A by giving him or anyone else a tax cut. Mr A can only be hired by the govt giving actual cash to somebody.
If this was the case, interest rates would rise. But we haven’t seen any kind of interest rate hikes that would have been consistent with a 10% GDP deficit. Under these particular circumstances, crowding out is negligible, which is why a positive multiplier is possible.
Crowding in occurs when, among other things, public activities allow private ones to succeed. Private companies do appreciate having infrastructure.
About the literacy rate. It all depends on your yardstick.
In 1882, fifth graders read these authors in their Appleton School Reader: William Shakespeare, Henry Thoreau, George Washington, Sir Walter Scott, Mark Twain, Benjamin Franklin, Oliver Wendell Holmes, John Bunyan, Daniel Webster, Samuel Johnson, Lewis Carroll, Thomas Jefferson, Ralph Waldo Emerson, and others like them.
In 1995, a student teacher of fifth graders in Minneapolis wrote to the local newspaper, “I was told children are not to be expected to spell the following words correctly: back, big, call, came, can, day, did, dog, down, get, good, have, he, home, if, in, is, it, like, little, man, morning, mother, my, night, off, out, over, people, play, ran, said, saw, she, some, soon, their, them, there, time, two, too, up, us, very, water, we, went, where, when, will, would, etc. Is this nuts?”
If this was the case, interest rates would rise.
Non sequitor.
But we haven’t seen any kind of interest rate hikes that would have been consistent with a 10% GDP deficit.
Because the interest rate is manipulated by huge influxes of money by the fed.
Under these particular circumstances, crowding out is negligible,
That’s not what small businesses all over the country are saying.
which is why a positive multiplier is possible.
Non sequitor. The positive multiplier is a myth.
Crowding in occurs when, among other things, public activities allow private ones to succeed.
TY for the explanation. Of copurse public activities allow a very small number of private ones to succeed. For example, the company building the new school or road is “succeeding” in the sense that for thelimited time the govt gives it money, it has money. But that money had to come from somewhere, i.e. the private sector. It was bled to feed the small group that benefits.
Private companies do appreciate having infrastructure.
But do they appreciate paying high taxes for that infrastructure? it’s like saying a thief who leaves you a doormat after emptying the contents of your home has helped you, because people appreciate doormats.
Sure we need infrastructure. The govt has made a literal shambles of our infrastructure. But we need other things much more. Proof: The private sector isn’t willing to spend for infrastrycture unless forced to, having more important things to do with its money.
My first post showed just the opposite.
Infrasctructure, R&D, healthcare spending… all these categories displayed positive multipliers.
Even accepting that arguendo, it has no bearing on their source(s) of funding. That’s an entirely separate issue.
Accounting for financing doesn’t change much. The multiplier remains positive.
You’re missing my point, and with all due respect, I’m starting to wonder whether it’s deliberate.
My point is, just because an immoral action can bring about a benefit doesn’t make the action any less immoral. There’s also the issue of broken windows to take into account, no matter how hard you try to ignore it.
That is a valid argument. If you believe that reducing unemployment and raising economic growth are not legitimate policy objectives when they involve increasing taxes, then I would have to disagree.
I don’t believe it’s a legitimate policy objective to follow metrics that make no distinction between broken and unbroken windows.
Can you give a specific example?
Have you actually read Bastiat’s parable of the broken window?
I am going to mention that there are not stimulus program employees throwing rocks into windows. And you are going to call me a troll.
Please give me a specific, real life example.
Does this mean you categorically dismiss the point Bastiat was making in his parable of the broken window? If so, why?
Because it virtually never happens in reality.