by Summary:
Neoclassical economists claim money doesn't matter. This belief is as absurd as saying water doesn't matter for a fish. Money creation by banks fuels production and growth. Imagine a car running on empty. It won't get far. Ignoring money's role is like ignoring fuel in an engine. Mainstream models often omit banks and private debt. This is akin to a chef ignoring ingredients in a recipe. Without understanding how money flows, we can't grasp economic reality. Take the 2007 financial crisis as a lesson. Neoclassical economists failed to predict it because they ignored the role of debt. They treated banks as mere intermediaries, like a waiter taking orders but never cooking. In reality, banks create money when they lend. This is a fundamental truth, yet it’s often overlooked.
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Neoclassical economists claim money doesn't matter. This belief is as absurd as saying water doesn't matter for a fish. Money creation by banks fuels production and growth. Imagine a car running on empty. It won't get far. Ignoring money's role is like ignoring fuel in an engine. Mainstream models often omit banks and private debt. This is akin to a chef ignoring ingredients in a recipe. Without understanding how money flows, we can't grasp economic reality. Take the 2007 financial crisis as a lesson. Neoclassical economists failed to predict it because they ignored the role of debt. They treated banks as mere intermediaries, like a waiter taking orders but never cooking. In reality, banks create money when they lend. This is a fundamental truth, yet it’s often overlooked.
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Steve Keen considers the following as important:
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| Neoclassical economists claim money doesn't matter. This belief is as absurd as saying water doesn't matter for a fish. Money creation by banks fuels production and growth. Imagine a car running on empty. It won't get far. Ignoring money's role is like ignoring fuel in an engine. Mainstream models often omit banks and private debt. This is akin to a chef ignoring ingredients in a recipe. Without understanding how money flows, we can't grasp economic reality. Take the 2007 financial crisis as a lesson. Neoclassical economists failed to predict it because they ignored the role of debt. They treated banks as mere intermediaries, like a waiter taking orders but never cooking. In reality, banks create money when they lend. This is a fundamental truth, yet it’s often overlooked. The Bank of England has confirmed this. When banks lend, they create deposits. This is the opposite of the traditional view. If we ignore this, we miss the bigger picture of economic dynamics. Debt levels matter, not just their distribution. It's like saying the weight of a ship doesn't matter, only where the cargo is placed. High debt can lead to economic instability. When debt rises, spending increases, fueling growth. But when debt falls, spending drops, leading to recession. This is why understanding money is crucial. Without it, we’re navigating in the dark. We need a new economic framework that acknowledges this reality. Only then can we build a sustainable future. Let's not be like the fish that forgets about water. We must recognize the vital role of money in our economy. Only then can we truly understand and address the challenges we face. |
Banks don't create money
Interesting. But, what happens when the money creators pick and choose who gets money (business partners, friends, and family) and at what rates.
Ay Don , you are wrong
And the guy that liked your comment is also an idiot
If it stopped raining or any number of other things it could well be hell on earth and humanity wiped from earth. Allah S.W.T. is the One.
Usury and banks, bankers are perpetuaters of systems of oppression that create a perpetual rich who gain unjustly off of other humans hard earned labor. Thankfully God knows all. 😅