Reply To: Space Fountain

[Duke Leto]

tcg wrote: A truly fascinating discussion.

I can only take issue with one point. The math indicating a drop in GDP of three trillion seems valid, as far as it goes. It represents a store of money not expended in electricity costs, but what would happen to it then? I am not sure of the proportions, but a substantial part of electrical usage is in homes. A savings in electrical costs there would put more money in the hands of consumers, a group notorious for spending into the economy any spare cash they have lying around. The rest of the savings would be enjoyed by industry which could use it to expand and create more jobs. Electrical costs are the main limiting factor to profitability of many businesses. I suggest that this savings of money would jump back into the economy in a variety of ways.

If we were in a normal economy a lot of it would get consumed, but we’re in a depressed economy where everyone is trying to save. If you’re fighting against your mortgage on an underwater home the first thing you are going to do with a windfall of money is try and pay off that mortgage. That decreases your indebtedness. That decreases the overall quantity of indebtedness, which shrinks the money supply, which further depresses the entire economy. I was trying to make that clear but I didn’t do such a good job. We’re still reeling from the effects of the credit crisis in the US and may be for years to come.