The Broken Window Fallacy (no accents)

This short video explains one of the most persistent economic fallacies of our day.

Made by Sam Selikoff and Luke Bessey.
See Luke's page: http://www.youtube.com/lukebessey
See Sam's blog: http://lonelyliberal.tumblr.com/

• Category

  Education

[evilzzzable]

Excellent analysis; and it is the flipside to (not) thinking that you can increase wealth simply by printing more money. This just creates inflation. The money supply is simply the medium of exchange. The wealth is the goods and services.

[TheKordane]

Very well done video. Very well done indeed.

[beagledog2011]

it works in both ways. The govt works spending can be an empty pit that wont circulate the money. The added trouble of the govt work is that it is in addition wasteful spending. Look at the 222,000 bathroom that was reported recently.

[Angryp0nY]

Which is why Obama's Trillion Dollar Coin is so retarded.

[Carson Brock]

Wrong. The money would circulate by surplus money through bank lending at naturally lower rates, more aggressively lent. That is only one scenario, unseen just as the video illustrates. Bottom line- Democrats break windows as an excuse to take more money, gain control, while creating dependency. Idiots! Greedy, filthy ideologues hellbent on Socialism.

[Kevin Cronin]

lol. This video takes a very good point, and comes away with broad conclusions that don't measure up or account for any other factors.

[Aggress92]

I'm still not sure why anyone respects Krugman.

[DizytheLizzyDinosaur]

not really accurate- The gov't taking spends like $300,000 to pay the worker's $30,000 salary. In the private sector you would not have all of this waste. I would cost the Private Company $40,000 maybe for that $30,000 salary (insurance and benefits added in). Thus the waste is still the biggest problem. People need to DEMAND efficient logical use of their tax dollars for things like infrastructure, but we don't benefit from the hooligan either.

[mediastarguest]

2:50 Not strictly true; the citizens may choose NOT to spend their income - there may be more savers than spenders; then the money will not circulate

[Dharma Bum]

Nice. I was simply looking for clarification on your statement. Relax. Sheep? Hardly. Perhaps I missed where I accepted the theory as fact. If you could point that out for me, I'd appreciate it. Anyway, Krugman's statements about war and terror and it's economic benefits, regardless of where you stand on the theory, are quite grotesque.

[marcelleqb]

Yes, exactly. That's exactly what I said. In big letters, written all over the place. In fact, let's all invest in nothing but insurance for the sole purpose of supporting the "death and destruction" method of fueling economic growth, because that's what I've been saying all along...sheesh. That's sarcasm, btw.

If you can't think critically and challenge theory, you're nothing more than sheep. I'm done with this conversation.

[Dharma Bum]

Are you advocating death and destruction to fuel economic growth?