Monday, January 28, 2008

Government as Window Breaker (Lew Rockwell)

Lew Rockwell gave a talk this past weekend entitled Government as Window Breaker: Hazlitt's Lesson Reapplied. In the talk, Mr. Rockwell shows that the violation of Frédéric Bastiat's lesson of the "broken window fallacy" that Bastiat wrote about in That Which is Seen, and That Which is Not Seen (reprinted in Henry Hazlitt's Economics in One Lesson) is still widespread today, especially in government economic policy.

Here's an excerpt from Lew Rockwell's talk:

I ask you to consider the absurd discussion of a stimulus package designed to rescue the economy from recession. The idea is that the government will inject funds into private markets to stimulate them to the point that they will run on their own. Not once in this debate have I heard anyone ask the core question: where is this money going to come from?

It seems that Washington wants us to believe that they have some magic machine that can turn up $150 billion in new assets without anyone having to do anything to make these assets appear. One wonders, then, why we need to wait until a recession to stimulate the economy. Why not magically create hundreds of billions every day, and not just for this country but for the entire world? Why are we holding back?

Read the entire transcript of Lew Rockwell's talk

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