The Broken Window Fallacy

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

Tags:

• broken window
• economics
• Austrian
• libertarian
• paul
• krugman

[familyguy350z]

@esimon7188 u really need to read How an Economy Grows and why it crashes by Peter Schiff, it's written for 10yr old so u'll be fine.it doesnt matter what people do with that money. If they spend it that's fine and if they save it that's even better because that money is used to as capital to finance other economic growth! banks can now loan that savings to a person who wants to start a business who then hires people and creates ACTUAL GROWTH. its time to wake up and stop getting brainwashed.

[Hazu1337]

RIOTS!!! WE NEED BIG CITY RIOTS!!!

[rofllolzkek]

from a birds eye view obviously if you go around destroying resources then on a holistic level society becomes less wealthy. but when you narrow it down and look through the eyes of each individual actor this reasoning becomes irrelevant, and in fact counter to their self interest. the person selling windows thrives on other individuals needing windows, and the more the better, at least for him. so on and so forth.

[666or999]

@SaturnEternity No ignoring that which isn't blindingly obvious is very much a fallacy and a very common one as well. It can hardly be considered gross oversimplification when the whoel point is too show that people are oversimplfing by not considering all the factors.

[CinderSerenade]

The glazier buys a suit, tailor buys crops: problem = fixed

[SaturnEternity]

Not exactly a fallacy, more like a logical loophole. Also, gross oversimplification on anything is usually never a good way to explain much bigger problems.

[LIGHTRONIX]

Sometimes when people aren't buy surf boards, ridges, and movie tickets, it's necessary to get money moving by funding public works projects.

[satoau1]

@jnobes7 sorry for the 2nd reply but u made 2 points. don't you think all road users should have to pay for the cost of the road? even if you don't use a car your life depends on others being able to move themselves and their goods freely around the country.

[satoau1]

@jnobes7 no they cost so much because there's a lot involved: land acquisition, removing the soil that can't support load, filling with gravel, building stormwater drainage, paving (tarmac is very expensive), and even more, plus add the profit the company will need to make if it's not public. how does competition make the amount of work and materials needed go down? u can get lower cost by building a crappy road that starts becoming uneven in a few years sure.

[xCohta]

@CassAnayadotcom

I'm sure cutting taxes wasn't what put our government in such a huge debt and I think you and I both know that Bush had far worse decisions than tax-cuts. Like that war... when all i could do was tear the hair from my head seeing "what a tragedy, war kills 78 americans..." but they forgot to mention the 150,000 iraqi's dead. many whom which were innocent, including women and children.

Please educate yourself about economics and stimulus plans then revisit the comment box.

[jnobes7]

@CassAnayadotcom economics isn't for everyone... I suggest rewatching the video a few times until you understand it.

[jnobes7]

@satoau1 they only cost so much to build because there is no competition in road building because the government does it, if you have multiple companies bidding on roads and being able to fire bad companies, it would work better.

tax fuel, car purchases, etc to build, not income taxes