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    Hazlitt - Public works mean taxes

    I am currently reading Hazlitt's Economics in one lesson. I say reading but what I really mean to do is analyse his arguments. I want to do it chapter by chapter here on the forum.

    The broken window fallacy chapter is pretty self evident so I would like to start with chapter three instead.

    Fore note:
    "A certain amount of public spending is necessary to perform essential government functions. [But] I am here concerned with public works considered as a means of “providing employment” or of "adding wealth" to the community that it would not otherwise have had." - Henry Hazlitt

    The question: Do public work projects like a bridge, provide employment at the expense of employment in the private sector?

    Hazlitt's Answer: It is true that a particular group of bridge workers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000,000. They will have that much taken away from them which they would otherwise have spent on the things they needed most. Therefore for every public job created by the bridge project a private job has been destroyed somewhere else.All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, radio technicians, clothing workers, farmers.
    Last edited by mohassan; 11-13-2012 at 09:42 AM.



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