by Summary:
Mainstream economics has a blind spot. It ignores private debt. This oversight is like trying to navigate a ship without a compass. You might think you're on course, but the reality is you're lost at sea. Credit is the lifeblood of the economy. It fuels growth and drives performance. When we overlook it, we miss the crucial factors that determine economic health. Take a look at the relationship between credit and unemployment. From 1990 to 2014, a staggering correlation emerged. The regression showed an R² of 0.85. That’s a powerful indicator. It means credit levels are a major determinant of economic performance. Yet, mainstream economists like Ben Bernanke dismiss this as mere “redistribution.” They argue it has no significant macroeconomic effects. But the
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Steve Keen considers the following as important:
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Mainstream economics has a blind spot. It ignores private debt. This oversight is like trying to navigate a ship without a compass. You might think you're on course, but the reality is you're lost at sea. Credit is the lifeblood of the economy. It fuels growth and drives performance. When we overlook it, we miss the crucial factors that determine economic health. Take a look at the relationship between credit and unemployment. From 1990 to 2014, a staggering correlation emerged. The regression showed an R² of 0.85. That’s a powerful indicator. It means credit levels are a major determinant of economic performance. Yet, mainstream economists like Ben Bernanke dismiss this as mere “redistribution.” They argue it has no significant macroeconomic effects. But the
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
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| Mainstream economics has a blind spot. It ignores private debt. This oversight is like trying to navigate a ship without a compass. You might think you're on course, but the reality is you're lost at sea. Credit is the lifeblood of the economy. It fuels growth and drives performance. When we overlook it, we miss the crucial factors that determine economic health. Take a look at the relationship between credit and unemployment. From 1990 to 2014, a staggering correlation emerged. The regression showed an R² of 0.85. That’s a powerful indicator. It means credit levels are a major determinant of economic performance. Yet, mainstream economists like Ben Bernanke dismiss this as mere “redistribution.” They argue it has no significant macroeconomic effects. But the data tells a different story. Ignoring credit is like ignoring the engine of a car. You can admire the shiny exterior, but without that engine, it won't move. The truth is, high credit levels lead to low unemployment. Conversely, low credit levels contribute to rising unemployment. This isn’t just theory; it’s backed by historical evidence. During the Great Depression, credit swung from positive to negative. The result? A catastrophic economic collapse. So, what’s the right approach? We must integrate credit into our economic models. This will provide a clearer picture of how economies function. Only then can we make accurate predictions. Ignoring private debt is a recipe for disaster. Let’s change the narrative and focus on what truly matters. Because in the end, understanding credit is vital for economic stability. |
So it is basically a thermostat for trust in the future of the economy? If people take out credit they either see an opportunity to make a thing work, or they are nearly at the brink of insolvency?
Or taxed into insolvency.
Why does the label matter?
The peasants are screwed by debt. They are forced to pay the state's debts.