Deforestation for economic gain in tropical forests is often justified by the idea that profits can be reinvested to offset negative impacts. However, this approach is flawed because reinvesting all revenues from logging projects is unrealistic and can lead to resource depletion. Social cost-benefit analysis tends to favor logging by assuming all revenues will be reinvested, but more realistic assumptions show that deforestation may not be economically justified in the long run. The distribution of consumption financed by project revenues also plays a significant role in the economic case for deforestation.