Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (227396)	4/4/2005 9:17:50 PM
From: TimF	Read Replies (1) \| Respond to of 1573791

In the broken window analogy, the effort put in to replace conventional cars is the effort put in to replace broken windows. You where the one who set it up something like the classical broken window fallacy when you said "Since our economy is measured by aggregate demand (consumer spending + business spending + gov't spending - taxes), you can see how our economy, aggregate demand, could potentially increase greatly from an effort to get off the oil tit." No the cost of "an effort to getting off the oil tit" is real. It would be a burden on the economy. You can't put the "effort to" get off the "tit", as a plus. You can try to argue that the result of the effort will be a greater positive then the cost of the effort is negative, but if you are trying to argue that the effort itself is an economic positive than you are making the same mistake that those who argue that breaking windows helps the economy would be making. The cost for oil isn't a tax on the economy, its the normal costs for resources that are needed in production and transportation. Investments made to use resources more efficiently can have a positive return. If they do have a large positive return you normally don't need to subsidize them. If the positive return would be lower than most investments, or if they don't have a positive return than subsidizing the investments is usually not a good idea. I imagine that hybrids (or some other technology, but hybrids have the early lead) will gradually replace conventional cars. I believe it makes economic sense for this to happen. But it doesn't make economic sense to provide large subsidies or penalties to make the transition happen quickly. If in addition to the normal economic returns you have political reasons to reduce the use of oil than there might be more justification for subsidies (at least for people who support the political reasons, and who are not against subsidies in general) but the political goals should be separated and explicitly stated rather then hiding in a presumed economic reason. Tim