The Broken Window Fallacy

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When the world has a natural disaster, it is one of the most frightening and dangerous things around and can cause many negative outcomes. In the article “Recent Tornadoes and the Broken Window Fallacy,” by Julie Borowski June 02, 2011, it explains how horrible tornadoes in the Midwest and Massachusetts have caused hundreds of deaths and infrastructure, homes and businesses to be demolished. These events are devastating but nothing can be done to stop them since nature will take its course whether we like it or not. Julie Borowski mentions the broken window fallacy and how it relates to this topic. The brief summary of this policy is if something is destroyed by a natural or man-made disaster, then it is a boost to the economy because someone has to get paid in order to fix the destruction. The example for this is when a little boy breaks a window in a shop; the shopkeeper must pay a glass-smith to have it fixed. However, this is not the case at all. When paying for the new window, the shopkeeper has to spend his money on that instead of something beneficial for himself. This is an example of the economic concept called opportunity cost. Mankiw states the cost of something is what you give up to get it. This is demonstrated in the article when it states, “Money spent on rebuilding after the destruction is money that cannot be spent on food, clothing and other items.” The opportunity cost is the goods we are giving up, which are: food, clothes and other items. Understanding opportunity cost will cause you to think twice before doing something and should always be a main factor in your thinking process. These tornadoes in the Midwest and Massachusetts were extremely devastating to the surrounding land. Almost everything that came in contact with these horrible disasters were obliterated. Although the broken window fallacy claims this is a
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