DSGE is dead. However, Keynesian/Post Keynesian/Disequilibrium economics has not found the stable ground of an accurate and sufficiently deep metric with which base a new economics.  As I have suggested here numerous times before that metric is to be found in the subset of double entry bookkeeping known as cost accounting. Accounting on a supperficial level of debits and credits seemingly statistically appears to justify DSGE. However, on the level of cost, which is the most deeply embedded, constant and thus dynamic microeconomic factor, we have the correct statistics and the correctly understood relationships between those statistics to find a metric that enlightens the path toward macro-economic policies that will enable a new economics…..or rather the resurrection of one which was a world wide force prior to WW II and has subsequently been buried by a combination of false economic orthodoxy and financial self interest.

In other words COST Accounting is not a mere stochastic, momentary look at the economy…it is an integrative look at the ongoing/constant reality of the economy in terms of both statistical and dynamic forces. Those statistics show that total costs and hence by the rules and conventions of cost accounting total prices are always greater then total individual incomes simultaneously produced…..in real time. Thus commerce itself is in a radical and continual state of underlying PRICE inflation and individual income deflation. Of course this necessitates continual injecting of money into the economy in the only way presently allowed, namely as loans which require even more continuous money creation to pay back. Economists see this monetary inflation and mistakenly believe it is the primary cause of our problems, but they miss the more primary price inflationary nature of commerce/the costing/pricing system which exposes the subsequent continuous necessity of injecting more and more money just to tread economic water…as actually an economic effect of the deeper cause.   Austrians go nearly berserk about this fact (there ain’t no free lunch!) and mistake an accurate depiction of the problem….as its solution (deflation) despite the fact that there is already a deflationary monetary reality for the individual.

The solution to the problem is actually the dual policies of a direct gift of money to the individual and a general discount to consumers by retail merchants and then the rebating of those discounts back to participating merchants.