Steve Keen Has Re-discovered C. H. Douglas’s Social Credit Insight

If economies go into recession when the rate of change of debt falls and Debt/Loans are virtually the only way that additional individual demand can come into the economy (Employment/work for pay is a derivative of already present money),  then that confirms that the rate of flow of total costs always tends to exceed the rate of flow of total individual incomes and hence the economy relies upon continual borrowing which of course builds up until debt service is unpayable. It’s a catch-22, a being caught between a rock and a hard place.

Keen also seems to think that the turn over/velocity of money also contributes to the individuall’s available money supply, but that is a fallacy because all money recirculating back through the economy is business revenue and so not add to additional individual income. That plus just because an enterprise makes more profit doesn’t necessarily mean they are going to give their employees a raise, in fact that almost never happens as the business is much more likely to pay down debt and/or re-invest such profits both of which reduce possible individual income from the present economic and financial cycle and incur additional costs into a new one now created.

Keen would be smart to realize this and adopt the form of Douglas’s universal dividend  and discount/rebate policies….and my extension and innovations of them….that raise their effectiveness and power to the level of paradigm change.

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