Keen is right of course, but what is the more underlying insight we can discern from that fact so that we can intelligently craft policy to resolve it? If you notice the GENERAL trend of the above graph is continuously upward, that is from peak to peak the trend line is up through time. As continuously rising private debt is an ever increasing cost even at 0% interest that means that an economy forced to obey the paradigms of debt, loan and for production only….is inherently cost inflationary. This is why the 5 cent Milky Way candy bar of my youth is now $1.34 at Walmart despite a tremendous increase in technical innovation in its production.
I have told Dr. Keen numerous times over the last 3-4 years that I thought his de-bunking of DSGE neo-liberal economic theory was deserving of a Nobel Prize and I stand by that. However, the originator of Social Credit C. H. Douglas came to the above underlying conclusion almost 100 years ago and crafted policies that deal with it. My further policy extensions and philosophical exegesis of the concept underlying Social Credit that I call Wisdomics-Gracenomics enables an even better understanding of the concept behind the new paradigm required to resolve modern economies’ deepest problem and policies that more thoroughly saturate them with that new paradigm which is Direct and Reciprocal Monetary Gifting.
Perhaps Dr. Keen could acknowledge Douglas and myself if the Nobel committee is wise enough to award it to him at some future date.