Cash For Clunkers

Randall Forsyth on “Cash for Clunkers”:

What’s especially dispiriting is that this lesson was taught more than a century and a half ago by French economist Frederic Bastiat.

A shopkeeper’s window was broken by a little boy, which made for extra business for the glazier who fixed it. Extended to the ultimate, breaking every window in town would be the ultimate windfall for the glazier. The town’s income statistics and tax revenues would record a gain.

But the town would be worse off. Their old windows would be replaced with new ones, perhaps more energy-efficient, but the shopkeepers and homeowners would be out the cost of the new windows.

2 responses to “Cash For Clunkers

  1. That’s great! Finally some common sense in regard to this program.

    I’ve been asking how this qualifies as “stimulus”? All it looks to me like is a short term b12 shot that is just pushing the country into more debt. People are getting loans for an item that is not going to return any value. So the government in encouraging long term debt, yet again.

  2. Very good humorous statements from this writer.
    Since how long they will do on exchange for new ones in world markets.
    In India,You can exchange from textiles to automobile for new.There will be attractive discounts for exchange price.
    This is a new way to keep their customers into their folds.

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