Posted To RWER Blog 03/27/2018

@peterbloda

Yes, Keen via Minsky re-discovered the validity of C. H. Douglas’ A + B theorem which stated that A as a flow of individual incomes will not pay for A + B as a flow of costs. Keen’s debt deflation hypothesis (that a flow of the continual build up of debt service costs, even at 0% interest, will eventually overwhelm the ability to service those costs) is simply a re-statement of Douglas’ insight….and the costless nature of the new paradigm of Monetary Gifting…is the only actual solution to that conundrum.

Though this is obvious when one ACTUALLY sees it, the two reasons Keen hasn’t announced the new paradigm is because even though he has a first rate mind, he doesn’t have the full mental skill set for paradigm perception, and being a macro-economist is caught up in three times removed abstraction and so hasn’t looked directly at the everyday operations of commerce. Hence he misses the significance of the point of retail sale and how tying monetary policy directly to it can reverse the problematic build up of ever increasing costs.

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