“The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.”

Socialist Party presidential candidate Norman Thomas

Monday, January 13, 2014

Obama, dumber on economics than a fifth grader

President Obama lied when he said that extending unemployment benefits "creates jobs". Just as Nancy Pelosi lied when she said Obamacare would create "millions of jobs" and the administration lied when they claimed that the $850million stimulus would create millions of jobs. This is a version of the "broken window" fallacy of economics.

The broken window fallacy is the idea that throwing a rock through a shopkeepers window stimulates the economy because the shopkeeper has to replace the window, so the window repairman and window manufacturer make money from the broken window repair. What isn't stated is the missed opportunity for that money to be spent elsewhere.

Without the broken window, the shopkeeper might have spent that money hiring another employee, expanding his business, or spending it elsewhere. Likewise, Obama doling out unemployment checks to one group means that another group now has to do without that money. Contrary to what dumb democrat voters think, the government doesn't have money of it's own. Any money given to one group had to be taken by force by the government from another group. If you don't believe that, try withholding your taxes for a year.

Government handouts do not stimulate the economy or create jobs, it just buys you votes in the next election. The media understands this but they won't report it because it demonstrates the utter lack of economic understanding Obama has or more likely, what a self-serving charlatan he is.


Isaac A. Nussbaum said...

Not one person in a hundred could explain the broken window fallacy as well as you did. I'm impressed.

Ed said...

Thanks Isaac, coming from my harshest critic, your praise is highly appreciated. ;-)