Unfortunately economists have not perceived the primary reason for inflation which is the human civilization-long monetary paradigm of Debt Only as the sole form and vehicle for the creation and distribution of new money wed to the largely delusional body of free market theoretics which is a complete misnomer for what it actually is which is alternately goosed and strangled and continually dominating monetary/financial chaos. The proof of this, which has been repeated many times historically according to Ms Kelton’s colleague Michael Hudson and others, is the great financial recession of 2008 where finance’s “innovation” screws up the economy and then they are bailed out while the individual is forced to “go scratch”.

A new monetary paradigm of Direct and Reciprocal Monetary Gifting strategically integrated into the Debt Only system with the same accounting operations the banks use to create money only as debt, namely equal debits and credits that sum to zero, specifically at retail sale with a 50% Discount/Rebate policy and a 50% Gift of Interest/Debt Jubilee at point of loan signing and the spell of finance’s monopoly monetary paradigm is ended while the individual’s purchasing power is mathematically doubled, chronic erosive inflation is transformed into beneficial price and asset deflation and the delusion of free market theorietics is replaced by universally abundant monetary free flowingness which is the goal of economic theory. A few more regulatory and taxation tweeks with real teeth, and the new monetary paradigm is a temporal universe reality observed and experienced by all.

All of your conclusions are valid of course, but you’re not comprehending the deepest problem and hence the earth shaking solution, namely the new APPLIED monetary paradigm concept.

The present monetary paradigm for the creation and distribution of new money is Debt Only. Acculturated since the first day of human civilization its why its so hard for people to understand that government deficits (an aspect of the concept of Debt Only) are actually monetary gifts to the private sector.

Retail sale is the single macro-economic point of the entire economic process. Thus a 50% Discount/Rebate policy at that point doubles everyone’s purchasing power and so the potential demand for every enterprise’s goods and services, and yet with double entry bookkeeping makes the merchant whole on his entire price, does not cost the merchant a single additional penny and implements beneficial price and asset deflation for EVERY individual. Same equal debits and credits 50% method at point of loan signing continuously integrates debt jubilee into the economic process instead of suggesting a one off ineffective “modern debt jubilee” which sociologically misses the long standing financial and corporate oligarchy. Reforms are shallow and easily over thrown. Paradigm changes totally invert anomalous realities and hence resolve them…until new insights are discovered.

Too much consumption? Mitigate consumption and direct and increase investment with a policy of a sliding scale of required investment of monetary gifts into eco-energy R & D bonds. This tax/cost is still a gift and so philosophically aligns with the new paradigm. And there are other policies to prevent inflation through out the entire economic process using taxation, double entry bookkeeping and monetary gifting.