The Broken Window Fallacy

One of the most important concepts to understand how misguided our economic policies today are is the “broken window fallacy.” The video below does a very good job of simplifying it.

This isn’t a new concept, and it can be pretty obvious to anyone, especially economists. Which likely means that the intellectual class in Washington fully understands it, but growing jobs and wealth isn’t at all the goal of their economic policies.

For a population that doesn’t understand basic economic concepts like the broken window fallacy, what they do understand is getting free stuff, interpreting that stuff as wealth or accomplishment, and then voting for the party that gave it to them.

Not understanding what they can’t see on the surface, how that money would have been spent better and built a flurry of job opportunities for a career rather than a temporary handout, is what the politicians bank on.