Biden, Broken Windows, and the American Jobs Plan - The American Spectator | USA News and Politics
Biden, Broken Windows, and the American Jobs Plan
Steve Mann/

In 1850, the French economist Claude Bastiat published the essay “That Which Is Seen, and That Which Is Not Seen,” also known as the “Broken Window Fallacy.”

In the essay, Bastiat describes a hypothetical situation in which the son of a baker accidentally breaks the windowpane in his father’s shop. This unfortunate event forces the baker to hire a glazier to repair the window.

Some economists foolishly view the baker’s misfortune as a positive economic development. They argue that it allows money to flow from the baker to the glazier, thus creating more wealth and opportunities for the glazing industry.

But according to Bastiat, economists who only focus on that which is seen do not take into account all of the stakeholders, nor do they factor in that which is unseen. The shortsighted economist does not have a full grasp of the deleterious outcomes that follow a momentary gain.

As Bastiat writes, “the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.”

In other words, the economist who supports the “broken window fallacy” focuses only on some of the individuals or groups who may benefit from that particular circumstance while ignoring the adverse effects that it may have on another individual or entity.

And the baker who was forced to spend his money to fix the window is now unable to use that money on something else from which he and someone from another industry could have benefited. As Bastiat explains,

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library.

The baker paid for a service to replace something that he already owned, which meant that he now had less money to spend on other goods or services that would have also benefited a shoemaker, a bookstore, or some other industry. “It is this third person who is always kept in the shade,” Bastiat writes.

This brings us to President Biden and his American Jobs Plan (AJP), about which I have written previously in The American Spectator.

It is unlikely that Biden is familiar with the “broken window” concept or any of Bastiat’s economic wisdom. If he were, he probably would not have advocated a plan that is unlikely to benefit anyone that it is supposedly intended to help.

The AJP calls for $213 billion to “produce, preserve, and retrofit more than two million affordable and sustainable places to live,” a $174 billion investment in the electric vehicle (EV) market, and $100 billion to “build high-speed broadband infrastructure to reach 100 percent coverage.” All of these items will come at a serious cost to the American taxpayer.

Biden has never bothered explaining why two million homes need to be built or retrofitted, nor has he said what the demand is for building 500,000 EV charging stations or broadband infrastructure. If he did for the last, he would have to point out that 313 million Americans, or 85 percent of citizens, already have access to the internet.

Instead of letting the consumers dictate what they want to do with their own money, Biden is creating an artificial supply that is not contingent on a market-based demand. Forcing the taxpayer to hire Democrat-run union workers to rebuild something that most Americans do not need does not stimulate economic growth.

Bastiat writes that “Society loses the value of things which are uselessly destroyed … to break, to spoil, to waste, is not to encourage national labor … destruction is not profit.”

Perhaps this is why, as a Penn Wharton Budget Model estimates, the AJP if implemented will cost the American taxpayer $2.7 trillion while raising only $2.1 trillion over the next 10 years. The same study also found that the AJP would increase government debt by 1.7 percent and discourage business investment, thus reducing our GDP to 0.8 percent by 2050.

Evidently Biden has not learned his lesson from his time as vice president during President Obama’s Cash for Clunkers program (CARS), in which Americans had the option of trading in their car for a more environmentally friendly one. Obama promised that CARS would create 70,000 new jobs, but only 3,676 materialized, all while costing the American taxpayer $1.4 million per job, or $2.85 billion.

Like Obama, Biden is using us as pawns. By focusing only on that which is seen, such as new homes or charging stations, Biden will be able to conveniently ignore the unseen consequences of his proposed infrastructure policies, including senselessly increasing our national debt and paying off Democrat cronies. The American people have now become the baker, while Biden’s constituencies represent the glazier.

But at least the bakery owner received a new window in the end. It remains to be seen if we will receive anything at all.

David Keltz was a speechwriter for the Administrator at the U.S. General Services Administration from 2020–21 and is the author of the new book The Campaign of His Life and Media Bias in the Trump Presidency and the Extinction of the Conservative Millennial. He previously served as a White House Intern for Vice President Mike Pence. You can follow him on Twitter @david_keltz.

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