Krugman’s Space-Alien War Stimulus Fallacy
Paul Krugman believes war is good for economies. This is Bastiat’s broken window fallacy in action. A rather dangerous example of it, some would say.
This is near as bad as his post-9/11 economic “analysis”.
These aftershocks need not be major. Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good. But there are already ominous indications that some will see this tragedy not as an occasion for true national unity, but as an opportunity for political profiteering.
… First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.
