Obama, Bastiat and Economic Stimulus Packages

Abstract

The Obama stimulus package has been less than a total success if one is to compare what was predicted to what has been delivered to date. The crux of the problem is that the economic planners have ignored or failed to take into account the secondary effects that increased government spending has on the economy. Frederic Bastiat (1801-1850), a French economist and journalist, discussed this point in his classic essay, What Is Seen and What Is Not Seen. This paper begins with a discussion of Bastiat’s essay, then applies Bastiat’s line of reasoning to the current economic situation. A bibliography with links to other Bastiat studies is also included.

Keywords: utilitarian, ethics, rights theory, Frederic Bastiat, Obama, history of economic thought, French liberal, Broken Window Fallacy, justice, redistribution, rent seeking, Keynes, multiplier, theory of government, plunder, protectionism, trade, opportunity cost, bailouts, public works

JEL Classification: B1,B12,B13,B22,B25,B31,B53,D63,D72,E12,E13,E21,E24,E51,F1,F13,H1,H2,H23,H81,K11,O24,P16,P14