Okay, today in "Ellie tries to understand financial markets," why is the Coronavirus tanking stocks? 1) it's not going to, like, kill all the consumers 2) it will increase health care costs, and health care is part of financial markets So I'm confused?
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But boosting the economy isn't that simple The broken window doesn't actually boost the economy because the window, before I broke it, was part of the economy - it was doing something positive and useful (looking pretty, insulating the house, keeping bugs out)
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It looks like I've created positive economic activity by breaking the window - some glazier gets a job to do and gets paid to do it and passes on the money to a company that makes windows and they all spend that money on other stuff etc But it's a net loss in the big picture
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I know the response to this is generally asserting that that money wouldn't be sitting idle (and therefore can't be spent on something else) but if it *were* idle, would it be fallacious? Could we stimulate the economy by forcing the rich to spend more?
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The idea of money sitting idle is what Keynesian economic theory and "stimulus" is about, yes, although avoiding the broken window fallacy is a big part of what it's about Like people joking about FDR in the Depression "paying people to dig holes and fill them up again"
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