--- Doug Henwood <dhenwood at panix.com> wrote: > Brad Mayer wrote:
>
> Remember, though, that a lot of this surplus capital equipment
> becomes obsolete very quickly, so while it may represent a big loss
> to the people who bought it (or financed it, in the case of busted
> IPOs), it may not represent the same economic overhang that a bunch
> of redundant steel mills would have a generation or two ago.
I must confess to the guilty secret that I have always had a blind spot for this argument. I've never been able to understand how physical objects can be a drag on the economy merely by existing. I can see how they are worthless, but the "overhang" argument seems to suggest that surplus capital effectively has negative output. Unless you make what I would have thought were absurd assumptions about space constraints, surely it could just be ignored? Hell, there's always the option of putting a couple of sticks of dynamite under the bloody things if overhang is so pernicious.
d^2
===== For the stronger we our houses do build The less chance there is of being killed
-- William McGonagall.
____________________________________________________________ Do You Yahoo!? Get your free @yahoo.co.uk address at http://mail.yahoo.co.uk or your free @yahoo.ie address at http://mail.yahoo.ie