Not quite. The point of the broken window fallacy is that had the money not been spent on the window, it would have been spent on something else. So breaking a window does generate revenue, but not necessarily more than not breaking a window
Whatever happens, the shopkeeper is in a worse position than he otherwise was
Here the point is that they’re passing the money back and forth. That’s like the AI companies right now - passing money round in a circle and that being presented as if it were the same thing as the industry as a whole making money
NVidia gives money to OpenAI, who give it to another company to build datacentres, who give it back to NVidia and NVidia’s Number Goes Up
But wouldn’t that be velocity of money, not GDP? GDP is a measure of final goods and services, not money. Unless you have a poop fetish and consider the eating of poop to be a final service, then this wouldn’t impact GDP.
Here the point is that they’re passing the money back and forth. That’s like the AI companies right now - passing money round in a circle and that being presented as if it were the same thing as the industry as a whole making money
The stock market value isn’t the same thing as GDP though. The GDP measurement is never really a great measurement of economic well being because of inequality, but even then, we really don’t know what it is in the US because Trump fires anyone that gives out a bad report.
The people handing money back and forth quickly was actually what happened when the pandemic ended, the increase in the velocity of money resulted in inflation but people blamed it on Biden. Now Trump is President, the economists have been fired and fraud has been decriminalized.
Isn’t this just the broken window fallacy but with a poop fetish?
Not quite. The point of the broken window fallacy is that had the money not been spent on the window, it would have been spent on something else. So breaking a window does generate revenue, but not necessarily more than not breaking a window
Whatever happens, the shopkeeper is in a worse position than he otherwise was
Here the point is that they’re passing the money back and forth. That’s like the AI companies right now - passing money round in a circle and that being presented as if it were the same thing as the industry as a whole making money
NVidia gives money to OpenAI, who give it to another company to build datacentres, who give it back to NVidia and NVidia’s Number Goes Up
But wouldn’t that be velocity of money, not GDP? GDP is a measure of final goods and services, not money. Unless you have a poop fetish and consider the eating of poop to be a final service, then this wouldn’t impact GDP.
The stock market value isn’t the same thing as GDP though. The GDP measurement is never really a great measurement of economic well being because of inequality, but even then, we really don’t know what it is in the US because Trump fires anyone that gives out a bad report.
The people handing money back and forth quickly was actually what happened when the pandemic ended, the increase in the velocity of money resulted in inflation but people blamed it on Biden. Now Trump is President, the economists have been fired and fraud has been decriminalized.