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Well, yes, instead of having potholes fixed, we'd be repairing the frame of our cars instead, at much much higher cost (and not doing other things). Further, pothole fillers end up employing lots of different kinds of people than a millionaire would. Finally, banks tend to loan to people with money... they don't typically loan to those who don't have money; it's not a zero-sum game.



I think you have a good point about filling potholes being cheaper than repairing cars, but that wasn't really the point I was making. (I'm not necessarily against filling potholes, just filling potholes excessively as make-work.) I was just pointing out that saying that government spending to hire pothole fillers for the express purpose of stimulating the economy is falling for the broken window fallacy. http://en.wikipedia.org/wiki/Broken_window_fallacy


It's actually not--you're misunderstanding the broken window fallacy.

The classic example goes like this: "Let's break windows and hire people to replace them! That's a stimulus!" OP did not suggest digging holes into the street and filling them, however--fixing road wear-and-tear is an investment in public infrastructure.


Maybe I misunderstood, but I got the feeling from the OP I was responding to that he was suggesting we fill more potholes in order to stimulate the economy. I'm kind of working off the assumption that we are already filling the important potholes often enough, so filling more potholes just to spend money sounds like make-work.


That's a good take, but the broken window fallacy assumes the intentional destruction of previous output. Thanks for clarifying your point.




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