comment on Krugman blog

Feb 17, 2009 14:08

So that I have a record what I wrote, even though I was too late to have the comment accepted:

The rate of increase of the backlog in desired capital stock might be accelerated by a broadly-based desire for "Greener" industrial processes. If the cost of disposing of waste products is brought home to producers rather than being treated as a "free" externality, existing industrial physical plant will become obsolete much more quickly than heretofore.

In addition to the "carrot" of stimulative spending, governments can make industry realize the cost of operation by ensuring that there is a "cost of carbon" entry on the liabilities side of the balance sheet as the "stick" of motivation.

Perhaps the war which will help end a 21st Century depression is the "War on Carbon Dioxide."
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