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Fox
Joined: 04 Mar 2009
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 Posted: Wed Sep 09, 2009 7:40 pm Post subject: |
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| Rusty Shackleford wrote: |
| RufusW wrote: |
| ELDOUCHE wrote: |
| Is this a girl writing this? otherwise you must be a male ballet dancer. |
Good point DIsbell, healthcare certainly would inject cash into the economy. And of course there would be less bankruptcies, a healthier, more productive workforce as well as more expendable income (less income spent on healthcare). |
The govt never can and never has "injected money into the economy." In order for the govt to have money, it must first EXTRACT money out of the economy. Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy.
http://jim.com/econ/chap02p1.html |
Except -- to use your web site's example -- if the glaizer genuinely benefits more from the business than the tailor (for instance, if the glaizer is relatively poor and the tailor is relatively rich), then one could easily argue that society in general is better off because of it. A citizen that might have suffered has not suffered because of said redirection, while a member that is all ready well off lost comparatively little.
Even if new economic activity doesn't occur, more socially beneficial economic activity might. Not all economic activity is equal in this regard. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Wed Sep 09, 2009 7:50 pm Post subject: |
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| I was merely suggesting spending on healthcare would 'inject' money the same way spending on healthcare would - they both can stimulate an economy, so neither figure is 'money lost'. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 7:54 pm Post subject: |
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| Fox wrote: |
| Rusty Shackleford wrote: |
| RufusW wrote: |
| ELDOUCHE wrote: |
| Is this a girl writing this? otherwise you must be a male ballet dancer. |
Good point DIsbell, healthcare certainly would inject cash into the economy. And of course there would be less bankruptcies, a healthier, more productive workforce as well as more expendable income (less income spent on healthcare). |
The govt never can and never has "injected money into the economy." In order for the govt to have money, it must first EXTRACT money out of the economy. Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy.
http://jim.com/econ/chap02p1.html |
Except -- to use your web site's example -- if the glaizer genuinely benefits more from the business than the tailor (for instance, if the glaizer is relatively poor and the tailor is relatively rich), then one could easily argue that society in general is better off because of it. A citizen that might have suffered has not suffered because of said redirection, while a member that is all ready well off lost comparatively little.
Even if new economic activity doesn't occur, more socially beneficial economic activity might. Not all economic activity is equal in this regard. |
From reading your first paragraph, I'm having trouble fathoming how you came to the conclusion you did. In any case, once you have made that conclusion, I guess it would be quite easy to jump to the line of reasoning you took in the second paragraph. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Sep 09, 2009 8:04 pm Post subject: |
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| Rusty Shackleford wrote: |
Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy.
http://jim.com/econ/chap02p1.html |
I assert that government spending on a police force is good because it benefits potential crime victims. So you're saying I'm a victim of the broken window fallacy? You're funny. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Sep 09, 2009 8:06 pm Post subject: |
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| Rusty Shackleford wrote: |
| Fox wrote: |
| Rusty Shackleford wrote: |
| RufusW wrote: |
| ELDOUCHE wrote: |
| Is this a girl writing this? otherwise you must be a male ballet dancer. |
Good point DIsbell, healthcare certainly would inject cash into the economy. And of course there would be less bankruptcies, a healthier, more productive workforce as well as more expendable income (less income spent on healthcare). |
The govt never can and never has "injected money into the economy." In order for the govt to have money, it must first EXTRACT money out of the economy. Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy.
http://jim.com/econ/chap02p1.html |
Except -- to use your web site's example -- if the glaizer genuinely benefits more from the business than the tailor (for instance, if the glaizer is relatively poor and the tailor is relatively rich), then one could easily argue that society in general is better off because of it. A citizen that might have suffered has not suffered because of said redirection, while a member that is all ready well off lost comparatively little.
Even if new economic activity doesn't occur, more socially beneficial economic activity might. Not all economic activity is equal in this regard. |
From reading your first paragraph, I'm having trouble fathoming how you came to the conclusion you did. In any case, once you have made that conclusion, I guess it would be quite easy to jump to the line of reasoning you took in the second paragraph. |
I also fail to see how repairing something that was broken could be in any manner more socially beneficial than not having broken the thing in the first place and spending the money somewhere else. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 8:09 pm Post subject: |
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| jaykimf wrote: |
| Rusty Shackleford wrote: |
Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy.
http://jim.com/econ/chap02p1.html |
I assert that government spending on a police force is good because it benefits potential crime victims. So you're saying I'm a victim of the broken window fallacy? You're funny. |
Good call. I honestly have trouble envisioning a private Police force. The Fire Service, maybe. I might be a hardcore Libertarian (ick, for lack of a better word), but I still believe there are some goods that the free market simply isn't very good at providing, as you can't easily charge for them(AKA "Public Goods.") |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Sep 09, 2009 8:29 pm Post subject: |
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| Kuros wrote: |
I also fail to see how repairing something that was broken could be in any manner more socially beneficial than not having broken the thing in the first place and spending the money somewhere else. |
No need to intentionally break things just so you can fix them. There are plenty of things that are broken already. A certain bridge in Minneapolis comes to mind for example. Of course they had to fix it after all those people died. How many more bridges in need of urgent repair are out there? Advocating that those bridges be repaired or rebuilt makes me a victim of the broken window fallacy? I don't think so. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 8:49 pm Post subject: |
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| jaykimf wrote: |
| Kuros wrote: |
I also fail to see how repairing something that was broken could be in any manner more socially beneficial than not having broken the thing in the first place and spending the money somewhere else. |
No need to intentionally break things just so you can fix them. There are plenty of things that are broken already. A certain bridge in Minneapolis comes to mind for example. Of course they had to fix it after all those people died. How many more bridges in need of urgent repair are out there? Advocating that those bridges be repaired or rebuilt makes me a victim of the broken window fallacy? I don't think so. |
Nobody is saying you shouldn't fix something that is broken.
The premise behind the fallacy is debunking the notion that taking money from one area and putting it into another, somehow promotes growth.
For instance, the US govt taking money from its future generations to fund projects that will win it votes. |
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Fox
Joined: 04 Mar 2009
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| Posted: Wed Sep 09, 2009 9:06 pm Post subject: |
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| Kuros wrote: |
| Rusty Shackleford wrote: |
| Fox wrote: |
| Rusty Shackleford wrote: |
| RufusW wrote: |
| ELDOUCHE wrote: |
| Is this a girl writing this? otherwise you must be a male ballet dancer. |
Good point DIsbell, healthcare certainly would inject cash into the economy. And of course there would be less bankruptcies, a healthier, more productive workforce as well as more expendable income (less income spent on healthcare). |
The govt never can and never has "injected money into the economy." In order for the govt to have money, it must first EXTRACT money out of the economy. Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy.
http://jim.com/econ/chap02p1.html |
Except -- to use your web site's example -- if the glaizer genuinely benefits more from the business than the tailor (for instance, if the glaizer is relatively poor and the tailor is relatively rich), then one could easily argue that society in general is better off because of it. A citizen that might have suffered has not suffered because of said redirection, while a member that is all ready well off lost comparatively little.
Even if new economic activity doesn't occur, more socially beneficial economic activity might. Not all economic activity is equal in this regard. |
From reading your first paragraph, I'm having trouble fathoming how you came to the conclusion you did. In any case, once you have made that conclusion, I guess it would be quite easy to jump to the line of reasoning you took in the second paragraph. |
I also fail to see how repairing something that was broken could be in any manner more socially beneficial than not having broken the thing in the first place and spending the money somewhere else. |
The social benefit lies in the well being of the people involved, not the products created. Obviously the government -- which Rusty is comparing to the window breaker -- is not going around literally breaking windows. It is, however, engaging in behavior that redirects economic activity, which can be good even if it doesn't result in more economic activity.
| Rusty Shackleford wrote: |
| The premise behind the fallacy is debunking the notion that taking money from one area and putting it into another, somehow promotes growth. |
And this is exactly what I was trying to address (though I evidently did it with insufficient clarity). Even if it doesn't promote growth, it can still be socially beneficial, and thus still be worth doing. Rusty said:
| Rusty Shackleford wrote: |
| Any person that asserts govt spending is good as it has benefits for some group of people is falling victim to the broken windows fallacy. |
My response was meant to convey that saying government spending is good because it has benefits for some group of people need not be based on fallacious reasoning at all. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 9:16 pm Post subject: |
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| Fox, I can accept your premise. But how do you calculate the outcome ex post (I think that is the right term.) We may be able to tell after the fact that, yes that particular instance of redistribution created a positive outcome, but how can you calculate it beforehand? And that doesn't even take into account the unintended consequences of govt action. Of which there are some hilarious examples. |
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Fox
Joined: 04 Mar 2009
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| Posted: Wed Sep 09, 2009 9:25 pm Post subject: |
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| Rusty Shackleford wrote: |
| Fox, I can accept your premise. But how do you calculate the outcome ex post (I think that is the right term.) We may be able to tell after the fact that, yes that particular instance of redistribution created a positive outcome, but how can you calculate it beforehand? And that doesn't even take into account the unintended consequences of govt action. Of which there are some hilarious examples. |
In some obvious cases it may be calculable before hand, but in many cases truly figuring it out in advance is likely impossible, and the best we could probably do is institute such regulations with a relatively short initial interval, and a mandatory "revote" after that interval so that we can see what the results were before making them permanent.
My interest lied primarily in defending the possibility of someone defending governmental redistribution without relying on the fallacy in question. How often we could successfully do such a thing, I don't know. With the current government in Washington, probably not often at all. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Sep 09, 2009 9:28 pm Post subject: |
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| Fox wrote: |
| Rusty Shackleford wrote: |
| Fox, I can accept your premise. But how do you calculate the outcome ex post (I think that is the right term.) We may be able to tell after the fact that, yes that particular instance of redistribution created a positive outcome, but how can you calculate it beforehand? And that doesn't even take into account the unintended consequences of govt action. Of which there are some hilarious examples. |
In some obvious cases it may be calculable before hand, but in many cases truly figuring it out in advance is likely impossible, and the best we could probably do is institute such regulations with a relatively short initial interval, and a mandatory "revote" after that interval so that we can see what the results were before making them permanent.
My interest lied primarily in defending the possibility of someone defending governmental redistribution without relying on the fallacy in question. How often we could successfully do such a thing, I don't know. With the current government in Washington, probably not often at all. |
OK. It's theoretically possible. But has probably never happened consistently over a long time scale in the history of governance. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Thu Sep 10, 2009 12:21 am Post subject: |
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| Fox wrote: |
| Rusty Shackleford wrote: |
| Fox, I can accept your premise. But how do you calculate the outcome ex post (I think that is the right term.) We may be able to tell after the fact that, yes that particular instance of redistribution created a positive outcome, but how can you calculate it beforehand? And that doesn't even take into account the unintended consequences of govt action. Of which there are some hilarious examples. |
In some obvious cases it may be calculable before hand, but in many cases truly figuring it out in advance is likely impossible, and the best we could probably do is institute such regulations with a relatively short initial interval, and a mandatory "revote" after that interval so that we can see what the results were before making them permanent.
My interest lied primarily in defending the possibility of someone defending governmental redistribution without relying on the fallacy in question. How often we could successfully do such a thing, I don't know. With the current government in Washington, probably not often at all. |
Okay, lets set aside the Broken Window then.
You're absolutely right, the government can spend well if properly directed. But, I don't think I have to convince you that several hundred representatives of the same number of principalities are interested in anymore than getting their district something that will get them re-elected. Fukuyama has made the argument that dictatorships can be better stewards (can be; no guarantees! corruption figures in here) of the public purse than can parliamentary or Federal democracies. But reportedly, even the fiscally responsible CCP has released a stimulus package that is slowly drifting into the stock market and the housing market, causing two emerging bubbles.
The problem is that the government often directs money to works that are not necessary, and borrows to do so.
I believe the most efficient form of government redistribution is progressive income taxes (although I say most efficient, even income taxes are not perfect). Progressive income taxes are levied on everyone, although not in equivalent proportion, probably in nearly equivalent burden. And its money not borrowed, but taken immediately and spent soon thereafter. And income taxes usually go towards some necessities, like bridges that need be repaired or in the case of state/local income taxes, to local administrators and police/fire forces. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Thu Sep 10, 2009 7:59 am Post subject: |
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| Rusty Shackleford wrote: |
Nobody is saying you shouldn't fix something that is broken. |
Then what is all this talk about deliberately breaking windows so that you can fix them? Nobody that I know of is advocating that.
| Rusty Shackleford wrote: |
The premise behind the fallacy is debunking the notion that taking money from one area and putting it into another, somehow promotes growth. |
When you have millions of people unemployed and productive capacity sitting idle, why wouldn't putting that productive capacity back to work create wealth and generate growth? What area is that idle capacity being taken from?
| Rusty Shackleford wrote: |
For instance, the US govt taking money from its future generations to fund projects that will win it votes. |
Wouldn't future generations actually inherit the wealth created by economic growth?
http://economistsview.typepad.com/economistsview/2009/08/paul-krugman-till-debt-does-its-part.html?cid=6a00d83451b33869e20120a57fee3c970c |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu Sep 10, 2009 3:17 pm Post subject: |
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| Kuros wrote: |
| Fox wrote: |
| Rusty Shackleford wrote: |
| Fox, I can accept your premise. But how do you calculate the outcome ex post (I think that is the right term.) We may be able to tell after the fact that, yes that particular instance of redistribution created a positive outcome, but how can you calculate it beforehand? And that doesn't even take into account the unintended consequences of govt action. Of which there are some hilarious examples. |
In some obvious cases it may be calculable before hand, but in many cases truly figuring it out in advance is likely impossible, and the best we could probably do is institute such regulations with a relatively short initial interval, and a mandatory "revote" after that interval so that we can see what the results were before making them permanent.
My interest lied primarily in defending the possibility of someone defending governmental redistribution without relying on the fallacy in question. How often we could successfully do such a thing, I don't know. With the current government in Washington, probably not often at all. |
Okay, lets set aside the Broken Window then.
You're absolutely right, the government can spend well if properly directed. But, I don't think I have to convince you that several hundred representatives of the same number of principalities are interested in anymore than getting their district something that will get them re-elected. Fukuyama has made the argument that dictatorships can be better stewards (can be; no guarantees! corruption figures in here) of the public purse than can parliamentary or Federal democracies. But reportedly, even the fiscally responsible CCP has released a stimulus package that is slowly drifting into the stock market and the housing market, causing two emerging bubbles.
The problem is that the government often directs money to works that are not necessary, and borrows to do so. |
I agree with Fukuyama; assuming a dictator has the best interests of his people at heart and is willing to actually do his job properly, he can be a better steward than the representatives of a democracy. When men who only have the interests of their people at heart, see the world with clarity instead of through the lens of ideology, and possess an immunity to corruption become at all common place, perhaps we can take advantage of that.
That aside, all I can say is that I agree governments often choose to redirect funds inefficiently and, to some extent, with thoughtlessness regarding the real consequences. Some of this is the result of human imperfection, but more of it is undoubtedly result of the fact that -- as you say -- most legislators just want to get anything for their districts that will get them reelected, even if it comes at a hidden cost far more detrimental than the gain. |
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