Broken Window Fallacy Logic

Peter Klein on some of the bone-headed logic behind enacting the stimulus plan:

Not to worry [about measuring "created or saved jobs"], says John Irons of the Economic Policy Institute. Indeed, the Obama Administration’s silly attempt to count “jobs saved” may actually underestimate the beneficial effects of stimulus, because “that construction worker [hired by stimulus funds] then goes out and spends money at a local diner, at a local McDonald’s or the local movie theater. That could very well mean an additional job.” Well, yes, but there’s the construction worker who wasn’t hired because investors, spooked by regime uncertainty, wouldn’t fund the construction project; the construction worker who won’t be hired tomorrow when taxes are hiked to pay for today’s stimulus; the construction workers who will sit idle at home when hyperinflation destroys the construction industry; and many other members of Bastiat’s “unseen” who would have spent money at diners and McDonald’s and movie theaters. But we never see those lost jobs, so — poof! — they don’t exist, and shouldn’t be counted against the free lunches wished into existence by Stimuluspalooza.

Some arguments defending the stimulus, such as Rob's fear of too much saving taking place, contain much more merit than what Irons is saying.

Relying on the broken window fallacy is just dumb.