Bastiat’s “broken window” fallacy continues to impoverish us. The Keynesian myth that government spending can create economic growth is a simple corollary of the idea. Which says, that if a child throws a ball and breaks a window, the replacement of the broken window creates employment and thence economic growth. Which clearly ignores the fact that labor and resources were expended and, at the end of the day, nothing was changed. The window is once again intact, but the economy is poorer because no value was added by the whole transaction, while resources that might otherwise have created economic value have been dissipated.

This is exactly what is going on in Washington. Government is taking everyone’s savings and throwing them away, destroying value, instead of investing them in activities which create value. Value destruction was a hallmark of the last days of the Soviet Union, where, for example, state-owned enterprises produced products that sold for less than the cost of the inputs.