Instead of building a simple bridge, that does the job of carrying vehicles across, people want an aesthetically pleasing bridge that will stand out. The government builds this bridge, but its consequences reflect back to you. Instead of putting the money into other government spending, it was used to make a more grandeur bridge. Another example is the building of low-income housing. The money that the government spends to build these is taken away from higher income individuals. They in turn can not spend as much in the economy. The point of this chapter is that all money comes from somewhere.
In chapter five, the effect of taxes on new business is seen. While the government takes money from every dollar of income, they do not give back money for every dollar of loss. This policy discourages new business enterprises, resulting in all around economic loss. Hazlitt defines this problem in saying, " the larger the percentage of the national income taken by taxes, the greater the deterrent to private production and employment". .
No business is ever started or ran without credit. Well run and established businesses are loaned money to support them, knowing that the money will eventually bring more profit. In the case that a business needs more credit than private institutions can provide, they turn to the government. The government gives out loans and subsidies to help with these businesses. While private investors look very carefully at whom they are lending money to, the government does not. Private institutions are risking their own capital in the hopes that it will eventually bring them a greater return. The government is not risking their own money; rather the money comes from us through taxes. Many of these government loans go to businesses that can not receive private loans. Chapter six shows how, through loans, the government is taking away from the successful businesses, and giving to the risky, unsuccessful ones.