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Stimulate the Economy by Breaking Stuff?

By Kevin

The video originally comes from the Mises University, and I last saw it at The Daily Capitalist. You can read an article by Frédéric Bastiat on the broken window fallacy at the Mises Economics Blog. “Claude Frédéric Bastiat was a French economist, legislator, and writer who championed private property, free markets, and limited government.”[1]

Further reading on the current economic situation and scares
  • MarketWatch: Reagan insider: ‘GOP destroyed U.S. economy’
  • Kitco: Peter Schiff: The Golden Decade
  • Wisebread: Philip Brewer: All About Deflation
  • Mises Economics Blog: Is Deflation Really Bad for the Economy?
  • Financial Samurai: The Katana: Deflation Is Out Of The Question
  • Mises Economics Blog: In Defense of Deflation
  • Mises Economics Blog: Murray Rothbard and the Deflation Bogey
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Filed Under: Miscellaneous Tagged With: Bastiat, broken window fallacy, deflation, economics, Mises

About Kevin

Kevin has left the office, and he is currently fighting the rat race by working on his own business. He enjoys exploring unvisited places around the world and gaining new experiences. He believes that by properly managing our energy and time, we can learn to invest our lives wisely.

Comments

  1. Mich@BeatingTheIndex says

    August 11, 2010 at 9:47 am

    Hi Kevin,

    Thanks for sharing this video, it makes sense.
    It looks like the Fed is taking baby steps towards new stimulus. Markets are opening lower today, sort of a baby crying for this stimulus…We are going through interesting times indeed….

    • Kevin says

      August 12, 2010 at 3:23 pm

      Looks like gold’s fairly happy, too, if oil a bit less so 😉

  2. DIY Investor says

    August 11, 2010 at 10:24 am

    Understanding the broken window fallacy is the beginning of economic wisdom. It is nicely described along with a lot of other commonsensical economics in “Economics in One Lesson” by Henry Hazlitt, available for free on line. Just Google “Economics in One Lesson”.

    • Kevin says

      August 12, 2010 at 3:25 pm

      Thanks for sharing that, Robert! Indeed, when it comes to economics and liberty, there are a great number of books available online, and for free; some of the best things in life are free 😉

  3. The Biz of Life says

    August 13, 2010 at 1:52 pm

    This is classic government thinking.

Trackbacks

  1. Beating The Index: Weekend Edition | BeatingTheIndex.com says:
    August 14, 2010 at 7:37 am

    […] Kevin at InvestItWisely shares an interesting video about the Broken Window fallacy. […]

  2. The Importance of Opportunity Costs, and Why They Should Not Be Ignored | Invest It Wisely says:
    October 19, 2010 at 8:02 am

    […] must all be considered. Frédéric Bastiat is a well-known economist who popularized the notion of the seen versus the unseen, and why we must always be on the lookout for […]

  3. Book Review: Economics In One Lesson | Invest It Wisely says:
    October 26, 2010 at 10:37 am

    […] The one lesson is very simple: It’s all about looking at the unseen, as well as the seen. It’s about considering the opportunity costs. When considering any economic policy, we must not only look at the short-run effects on some groups, but we must also look at the long-run effects on all groups. One prominent example of this is the broken window fallacy. […]

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