If it meant the same thing as when I did it, I didn’t like that Henry had put both his hands behind his head. I knew I had to say something, but I had a slight feeling of dread when I said, “Henry, what’s wrong with public housing?”
With both his hands still behind his head, Henry replied, “I do not intend to enter here into all the pros and cons of public housing. I am concerned only to point out the error in two of the arguments most frequently put forward in favor of public housing.”
Feeling slightly relieved, I said, “Okay, Henry, what are those two arguments?”
“One is the argument that it ‘creates employment’”, said Henry.
“Well, you’ve already demolished that as a valid argument for public works projects. What’s the other argument?”, I queried.
“The other is that it creates wealth which would not otherwise have been produced.”, Henry rejoined.
“So what are you really saying, Henry?”, I asked.
Henry was quick to respond, “Both of these arguments are false, because they overlook what is lost through taxation. Taxation for public housing destroys as many jobs in other lines as it creates in housing. It also results in unbuilt private homes, in unmade washing machines and refrigerators, and in lack of innumerable other commodities and services.”
“Well, Henry, that may be so,” I said, “but projects like public housing don’t have to be paid up front; they can be financed and paid over long periods of time. What about that?”
“None of this is answered by the sort of reply which points out, for example, that public housing does not have to be financed by a lump sum capital appropriation, but merely by annual rent subsidies. This simply means that the cost is spread over many years instead of being concentrated in one. It also means that what is taken from the taxpayers is spread over many years instead of being concentrated into one. Such technicalities are irrelevant to the main point.” replied Henry.
“You’re going to have a hard time convincing some people of that. They can see what exists. You are talking about what does not exist. It is surely very hard to prove a negative.”, said I.
Henry replied, “The great psychological advantage of the public housing advocates is that men are seen at work on the houses when they are going up, and the houses are seen when they are finished. People live in them, and proudly show their friends through the rooms. The jobs destroyed by the taxes for the housing are not seen, nor are the goods and services that were never made. It takes a concentrated effort of thought, and a new effort each time the houses and the happy people in them are seen, to think of the wealth that was not created instead.”
“Obviously, Henry, the advocates for government spending are not going to touch that with a ten-foot pole” I retorted, while trying to imagine what his response would be.
Henry sniffed, then stared at me.
With both his hands still behind his head, Henry replied, “I do not intend to enter here into all the pros and cons of public housing. I am concerned only to point out the error in two of the arguments most frequently put forward in favor of public housing.”
Feeling slightly relieved, I said, “Okay, Henry, what are those two arguments?”
“One is the argument that it ‘creates employment’”, said Henry.
“Well, you’ve already demolished that as a valid argument for public works projects. What’s the other argument?”, I queried.
“The other is that it creates wealth which would not otherwise have been produced.”, Henry rejoined.
“So what are you really saying, Henry?”, I asked.
Henry was quick to respond, “Both of these arguments are false, because they overlook what is lost through taxation. Taxation for public housing destroys as many jobs in other lines as it creates in housing. It also results in unbuilt private homes, in unmade washing machines and refrigerators, and in lack of innumerable other commodities and services.”
“Well, Henry, that may be so,” I said, “but projects like public housing don’t have to be paid up front; they can be financed and paid over long periods of time. What about that?”
“None of this is answered by the sort of reply which points out, for example, that public housing does not have to be financed by a lump sum capital appropriation, but merely by annual rent subsidies. This simply means that the cost is spread over many years instead of being concentrated in one. It also means that what is taken from the taxpayers is spread over many years instead of being concentrated into one. Such technicalities are irrelevant to the main point.” replied Henry.
“You’re going to have a hard time convincing some people of that. They can see what exists. You are talking about what does not exist. It is surely very hard to prove a negative.”, said I.
Henry replied, “The great psychological advantage of the public housing advocates is that men are seen at work on the houses when they are going up, and the houses are seen when they are finished. People live in them, and proudly show their friends through the rooms. The jobs destroyed by the taxes for the housing are not seen, nor are the goods and services that were never made. It takes a concentrated effort of thought, and a new effort each time the houses and the happy people in them are seen, to think of the wealth that was not created instead.”
“Obviously, Henry, the advocates for government spending are not going to touch that with a ten-foot pole” I retorted, while trying to imagine what his response would be.
Henry sniffed, then stared at me.
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