Steve Horwitz writes a short, lay piece on crowding out and job creation.
Brad “smacks down” Steve Horowitz.
Russ Roberts amplifies Horwitz with a nice point about the dangers of aggregation.
David Henderson notes that Brad misses what Horwitz is really saying.
Brad DeLong “smacks down” Steve Horwitz again, not acknowledging any of the criticisms. Brad writes:
Me: I don’t think so. Take
Government can only spend what it takes from the private sector one way or another, either through taxation, borrowing, or the redistribution effects of inflation. For every dollar that government spends, there is one less dollar being spent somewhere else in the economy…
and replace “government” by “Larry and Sergei’s internet company.” It then reads:
Larry and Sergei’s internet company can only spend what it gets from other businesses and consumers one way or another, either through sales or borrowing. For every dollar that Larry and Sergei’s internet company spends, there is one less dollar being spent somewhere else in the economy…
Brad’s claim is that Horwitz wouldn’t make the second claim and thus, he doesn’t really mean to make the first claim because they are equivalent. So Horwitz is a partisan hack.
Brad, Brad, Brad, Brad. This is so revealing. Brad really believes, I guess, that the government randomly spending money digging ditches or the equivalent (without regard to Russ’s well-highlighted concerns about where money is being spent, among many other things) is as productive as Google spending money inventing, making and improving its products for sale in the market. Brad really believes, I guess, that when Google engages in voluntary exchange with customers that it is offering value exactly equivalent to the value the government offers in exchange for an equivalent amount of involuntary taxation or inflation. Apparently Brad believes that the two cases are equivalent, so anyone who disagrees with the second must disagree with the first (and is thus being disingenuous in supporting the first claim). But anyone who would claim that these two cases should be treated equivalently and who would disregard the obvious and essential differences between government action and private exchange is an ethics-free partisan ass and shouldn’t be taken seriously.