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Yes, if central planners know the optimal way to spend each marginal dollar, then there is no broken window fallacy. I haven't heard any such case made for the

Yes, if central planners know the optimal way to spend each marginal dollar, then there is no broken window fallacy. I haven't heard any such case made for the popular green schemes.

skorgu 18y ago
I don't know what "popular green schemes" you're referring to, but a carbon tax or a cap-and-trade scheme are very nearly equivalent and require no central planning at all (save that required to enact, collect and enforce the tax of course) yet both bring externalities under market purview quite nicely.
- newt0311 18y ago
  And what happens to all that extra cash collected in the name of climate change? Oh the federal govt. centrally plans on how to waste it on congressional pork.
  - skorgu 18y ago
    Sorry for replying so late. As long as the tax revenue isn't spent on directly contradictory pursuits (tax breaks for SUVs or something) the increase in costs will do its job no matter how stupidly the government spends money. I think we should just blow it all on a space elevator personally but that's why I'm not in office I suppose.
    - newt0311 18y ago
      The point is not that the carbon tax/cap-and-trade/you favorite policy will work but that they will impose an unacceptably high cost in the process. Your comment does not respond to that concern. All that revenue for federal tax/subsidy policies will come out of the private economy which eventually means that it will come out of yours and my pocket and spent by the federal govt. Unless this is offset by corresponding decreases in income/payroll/corporate taxes, this will result in a loss to us and from the numbers that I have seen, this loss is unacceptably high.
      - skorgu 18y ago
        (Nearly) all spending by the gov't comes right back to (someone's) pockets so in the aggregate it's only a loss of the frictional losses to run the bureaucracy not the entire revenue base. Granted there are valid concerns about how the money is spent but you can't just take the dollar amount of revenue from the tax and say that's too high a price. It's much more complicated, sadly. Also, what cost? What numbers?

Yes, if central planners know the optimal way to spend each marginal dollar, then there is no broken window fallacy. I haven't heard any such case made for the popular green schemes.

skorgu 18y ago

I don't know what "popular green schemes" you're referring to, but a carbon tax or a cap-and-trade scheme are very nearly equivalent and require no central planning at all (save that required to enact, collect and enforce the tax of course) yet both bring externalities under market purview quite nicely.

newt0311 18y ago
And what happens to all that extra cash collected in the name of climate change? Oh the federal govt. centrally plans on how to waste it on congressional pork.
- skorgu 18y ago
  Sorry for replying so late. As long as the tax revenue isn't spent on directly contradictory pursuits (tax breaks for SUVs or something) the increase in costs will do its job no matter how stupidly the government spends money. I think we should just blow it all on a space elevator personally but that's why I'm not in office I suppose.
  - newt0311 18y ago
    The point is not that the carbon tax/cap-and-trade/you favorite policy will work but that they will impose an unacceptably high cost in the process. Your comment does not respond to that concern. All that revenue for federal tax/subsidy policies will come out of the private economy which eventually means that it will come out of yours and my pocket and spent by the federal govt. Unless this is offset by corresponding decreases in income/payroll/corporate taxes, this will result in a loss to us and from the numbers that I have seen, this loss is unacceptably high.
    - skorgu 18y ago
      (Nearly) all spending by the gov't comes right back to (someone's) pockets so in the aggregate it's only a loss of the frictional losses to run the bureaucracy not the entire revenue base. Granted there are valid concerns about how the money is spent but you can't just take the dollar amount of revenue from the tax and say that's too high a price. It's much more complicated, sadly. Also, what cost? What numbers?