Tuesday, August 23, 2011

My Take On The Broken Window Fallacy

While the essence of this video is true in an ideal world, the conclusion it draws is not usually true in real life. People may not spend their extra money in times of recession, and even if they spend, the created jobs might not be in line with the poor, which will take more time for them to adapt. So, ceasing stimuli and subsidies may contribute to more social unbalance that may prevent a society from ever reaching the point of equilibrium. That's why I champion a small form of financial support to maintain the stability within the society.

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