When my neighbor said that affordable housing causes one set of families to be forced to subsidize another set, I just had to get an explanation of that. “What’s the bottom line on this?” I asked.
“Look,” said my neighbor, I don’t intend to get into all the pros and cons of affordable housing right now. All I want to point out, right now, is there is a critical, fundamental error in two of the arguments most frequently put forward in favor of affordable housing. One is the argument that it ‘creates jobs.’ The other is that ‘it creates wealth which would not otherwise have been produced.’”
“Well, you’ve already demolished those as valid arguments for public works projects. What are you really saying?” I asked.
“What I’m saying is, both of these arguments are false. They overlook what’s lost through taxation. Taxation destroys as many jobs in other lines of work as it creates in housing. The result is unbuilt private homes, unmade washing machines and refrigerators as well as a lack of innumerable other commodities and services.”
“Well, that may be so,” I said, “but projects like affordable housing don’t have to be paid for up front. They can be financed and paid for over long periods of time. What about that?”
“It really doesn’t matter. Lump sum; annual rent subsidies; whatever; they’re the same thing. The cost is just spread out instead of being concentrated in one payment. It’s the same for tax collection. But, look, those are technicalities. They’re irrelevant to the main point.” replied my neighbor.
“You’re going to have a hard time convincing some people of that. You’re talking about what doesn’t exist. It’s very hard to prove a negative,” said I.
“Yes. Unfortunately, the great psychological advantage that affordable housing advocates have is that men can be seen at work on the houses going up. After they’re finished, the houses can be seen. But, and this is critical to understand, the jobs destroyed by the taxes used to pay for the housing are not seen. Neither are the goods and services that were never made. It takes a concentrated effort of thought to think of the wealth that was not created. What's more, it takes a new effort each time the houses, and the people in them, are seen.”
“Obviously, Neighbor, advocates for government spending aren’t going to touch that with a ten-foot pole,” I retorted.
“Is that surprising? People who push for affordable housing have to believe what I am saying is ‘mere theory.’ Sure, that’s false, but believing that allows them to dismiss the idea because they don’t want to be bothered with theory. They want to point to real buildings.”
“Look,” said my neighbor, I don’t intend to get into all the pros and cons of affordable housing right now. All I want to point out, right now, is there is a critical, fundamental error in two of the arguments most frequently put forward in favor of affordable housing. One is the argument that it ‘creates jobs.’ The other is that ‘it creates wealth which would not otherwise have been produced.’”
“Well, you’ve already demolished those as valid arguments for public works projects. What are you really saying?” I asked.
“What I’m saying is, both of these arguments are false. They overlook what’s lost through taxation. Taxation destroys as many jobs in other lines of work as it creates in housing. The result is unbuilt private homes, unmade washing machines and refrigerators as well as a lack of innumerable other commodities and services.”
“Well, that may be so,” I said, “but projects like affordable housing don’t have to be paid for up front. They can be financed and paid for over long periods of time. What about that?”
“It really doesn’t matter. Lump sum; annual rent subsidies; whatever; they’re the same thing. The cost is just spread out instead of being concentrated in one payment. It’s the same for tax collection. But, look, those are technicalities. They’re irrelevant to the main point.” replied my neighbor.
“You’re going to have a hard time convincing some people of that. You’re talking about what doesn’t exist. It’s very hard to prove a negative,” said I.
“Yes. Unfortunately, the great psychological advantage that affordable housing advocates have is that men can be seen at work on the houses going up. After they’re finished, the houses can be seen. But, and this is critical to understand, the jobs destroyed by the taxes used to pay for the housing are not seen. Neither are the goods and services that were never made. It takes a concentrated effort of thought to think of the wealth that was not created. What's more, it takes a new effort each time the houses, and the people in them, are seen.”
“Obviously, Neighbor, advocates for government spending aren’t going to touch that with a ten-foot pole,” I retorted.
“Is that surprising? People who push for affordable housing have to believe what I am saying is ‘mere theory.’ Sure, that’s false, but believing that allows them to dismiss the idea because they don’t want to be bothered with theory. They want to point to real buildings.”
“Right,” I said, in riposte. “Who are you going to believe, me, or your lying eyes? So, based on what we’ve covered, if I apply reasoning, the size of a public project is not relevant either.”
“Right, except for one thing. The bigger the project, the bigger the problem in seeing it for what it is. Take, for example, a project as big as the Tennessee Valley Authority, or TVA.”
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