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To: gogogodzilla

the difference between a good economist and a bad economist is that a bad economist can only see the immediate effect of the policy of the recipient, but not on the effect on all people in the economy

Economic in One Lesson, The Broken Window Fallacy. While the general store may owner may benefit from selling supplies to family to rebuild what was broken. Another general store owner (or the same store owner) may suffer, because instead of buying a new clothes for the season that year, both families were using their resources to replace what was ttheir broken windows.

So if you look at the entire economy.

Without the broken window, society would’ve one window, new clothes. To a society with a broken window, that only have the replaced window

Which society is richer? Obviously the society without the broken window


38 posted on 07/22/2010 8:04:27 PM PDT by 4rcane
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To: 4rcane
While the general store may owner may benefit from selling supplies to family to rebuild what was broken. Another general store owner (or the same store owner) may suffer, because instead of buying a new clothes for the season that year, both families were using their resources to replace what was ttheir broken windows.

You are mixing conjecture into the case. You could just as easily claimed that the family might have died from a random food borne illness, so by having spent the money earlier to replace the windows, it pushed the money into the economy instead of having the government confiscate a portion via the 'death tax'.

What *IS* known in this case... is that during the conflict, the families would need to purchase armaments, which is money that they would not have normally spent (and therefore there is more economic transactions occuring then a straight status-quo situation). And secondly, the survivors will have to make even more purchases to rebuild.

Claiming that they will now no longer be able to buy 'new clothes' (ie: other things) is speculation, for we do not know the entire situation of the families used in the example. Making this claim would indicate that you have more information on this scenario than is available, which you don't, so...

Perhaps they are well off, and can afford it all. Perhaps they would not have bought clothes next year, for they just bought new ones. Perhaps a meteorite will hit the earth and destroy all life on the planet, rendering the whole point moot.

48 posted on 07/23/2010 4:17:02 AM PDT by gogogodzilla (Live free or die!)
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