Seen and Unseen

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    So as we all know, the good economist concerns himself not only with what is “seen” but with what is also “unseen”. So are all the Obama-economics talking heads on TV correct to say that we see a trillion dollars lost, but what we don’t see are the millions of jobs that were “saved”? I don’t think it is true, but it does seem like the same language Austrians use can be applied here.,..but perhaps incorrectly?


    First of all, the “jobs created and saved” are hardly unseen. The administration has come up with all sorts of ridiculous statistics on that, and their cronies in the MSM have been parroting them constantly. Have you ever driven by a new road pavement and seen the signs advertising that the work is being done with stimulus funds? The government has gone out of its way to make it known how much supposed good this stimulus is providing.

    But I think you might be messing up the “seen versus unseen” analogy. The issue at hand isn’t whether money spent results in a particular outcome. Of course it does. The question is whether the money spent on one thing produces a better outcome than if the money was spent on something else. In the broken window fallacy, regardless of whether the window is broken or not, money will be exchanged for goods and services. If the window is broken and the shopkeeper exchanges $50 for a new window, he does in fact get a new window. But, he would have been much better off having his old window, and buying a new pair of shoes instead.

    The argument against the stimulus isn’t that we get absolutely nothing for it. It’s that due to government inefficiency and a lack of the messaging effects of the price system, we get far less from the stimulus than we would have gotten by leaving that money in the hands of the voluntary sector. That the government does NOT in fact know how to spend money “better” than individuals and corporations do. That there is a dead weight loss that makes us all poorer.

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