The reasons for the failure, and for the literally depressing pessimism that the failure seems to herald, were first described 160 years ago by Frederic Bastiat in his essay “The Seen and the Unseen.” Bastiat was describing the effects of economic actions, including public spending. That spending leads to results that are “seen,” meaning, in the case of the current stimulus, the jobs of medical residents, teachers, road builders, and the like—jobs created or preserved by stimulus dollars. Then there is the matter of what is “unseen”—meaning all the money government used for those projects that has been diverted, through taxes or borrowing, from other uses.
Usually, the public is too dazzled by the seen to take account of the unseen. So politicians often get away with saying they have “created” this or that many jobs by spending taxpayers’ money. Few follow the trail back to where the money came from or project it forward to divine the consequences. That was not the case this time. Quite the opposite, in fact.
Read the rest of James K. Glassman's Commentary article here.