Keynesians Love Winter

Posted on January 27, 2014 by

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This winter, with it’s below average temperatures and above normal precipitation, has been great for “economic stimulus” if the Keynesian economic theory that almost everyone in the United States believes is correct. At least that’s been true in my household. Beginning in mid December, we’ve had a series of minor automobile mishaps that have created, according to Keynesian theory, “extra” work not only for the automobile repair industry, but also the economy in general.

The third week in December my youngest son was traveling home from Wright State University during one of December’s many snowstorms and drove our 2002 Toyota into the ditch (see image 1).Toyota When I went to look at the accident, the ditch was about 8 foot deep, the Toyota was totaled. This accident contributed $5342.69 to the economy.

On January 23 I took our 2013 CRV into work, parking in one of Cedarville University’s lots, only to discover a “hit-and-run” when I went back to my vehicle (see image 2).crv While this didn’t look like much from the outside, The door doesn’t close properly and the steering wheel is sitting at about a 30° angle (see image 2a).crv2 Check out the little indicator lights that are on. Preliminary estimates $2361.06. I took the CRV to the repair shop today; I bet the economic stimulus will be more than $2300. While I was reading the CRV manual, to determine what the indicator lights indicated, my youngest son came in and said that he lost control of the Buick and hit the fence in the back of the yard (see image 3).fence No economic stimulus here, we’re just out the fence! No replacement.

On January 24 my youngest son was a little late home from school, when he arrived he said he had driven the Buick into a field and a nice gentleman had helps tow him out. There might be some damage (see image 4).Buick No economic stimulus here either, The 1997 Buick will simply have a little more character.

So after all is said and done, so far, we have contributed $7703.75 to our local economy. Greene County Ohio has a population of 163,587. If everyone in Greene County had contributed the extra “stimulus” to the economy that my family did this winter, the total stimulus would’ve been over $1 billion. With the population in the state of Ohio at over 11 million, the total stimulus would’ve been over 89 billion if each Ohio citizen would just contributed the way my family has contributed. The US population is over 315 million, so the contribution to our economy from this winter have been nearly 2.5 trillion if your family had just contributed as mine has! The 2009 American Recovery and Reinvestment Act was only 831 billion spread over a ten-year period. Keynesians love winter!

Frederic Bastiat’s 1850 essay “That Which is Seen and That Which is Unseen” introduced what has become known as the Broken Window Fallacy (you should read paragraphs 6 – 21 of Bastiat’s essay). If you’d prefer a wonderful short video of the concept: Bastiat’s Broken Window Fallacy.

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