In 1936, Keynes famously wrote that paying people to dig holes and fill them back up would boost the economy. Meanwhile, French economist Bastiat was spinning in his grave, having warned a century earlier about the "broken window fallacy" - the illusion that destruction creates wealth. When New Deal programs put thousands to work building bridges to nowhere, Keynesians cheered the employment statistics. But they ignored what Bastiat called "the unseen" - the private investments never made, the businesses never started, the innovations never pursued because capital was diverted to government make-work. Today's politicians still invoke Keynesian magic, claiming every trillion in deficit spending creates prosperity. They see the government jobs, the infrastructure projects, the GDP bump. They don't see the entrepreneur who couldn't get a loan, the startup that never launched, or the future growth sacrificed for today's political theater.
