Monday, February 27, 2017

Parable to the broken window fallacy

To be or not to be, that is the fallacy.

Hello and Crikey my fellow readers.
Jonathan coming at ya with another blog.

Today we are going to talk about the broken window fallacy and why it is just that - a fallacy.

To put it quickly, the 'broken window fallacy' says that in an economic setting that damage done is good because damage must be fixed. Thus, it stimulates the economy by giving money to the repairman. The repairman will then buy food from the farmer and so on.

Fortunately, we can disprove that and save our towns some serious consequence.

As convincing as it might sound, it is wrong. The unseen variable is the variable that we need to look at. For example, when you break a glass window, the money would have actually gone to buying a new suit instead.

This suit would be made by the towns tailor, who would buy food from the farmer, and so on like before. In this scenario, there is a suit and a window within the community.

Unfortunately, now though the damage must be repaired and the owner of said window, let this be the town baker, doesn't have a new suit, the town is down the cost and with nothing new to show for it.

Thanks again for tuning in (reading my blizzog). Hope it made some sense and if you have any other questions feel free to keep them to yourself.

 Just kidding.

 Leave a comment, and have a great day.

And remember to #supermanthatethos

This is Jonathan, Logging out.


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