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helpless with us
steve keen he's the assistant professor of economics and finance at the
university of western sydney
the author of debunking
economics
and his website which is a method must
deflation
dot com
check that out professor team from australia
thank you for joining us welcome loop welcome dot
we had its round-the-clock eliza deland
uh... television and i wanna
or revisit some of those topics you are a little longer for more than a grim
take this this entire our there will be
uh... you know
she breaks and things but uh...
i or or
breaks is worth it
okay let's let's
start ad
actually let's start where we are right now our weekend a depression
yes
that'd be the
he had imagine how long people pendant and all that bad fishing any problem
from f_e_m_a_ personal health richa
economic crises that this one of the depression it is not a recession
and uh... the senate we'd make that uh... tm categorization of a situation
where in personable stocking potentially temple policies rather than the entire
month of being debated right now nowadays
the the last great depression the one of the nineteen thirties was not identified
as a depression for some time
dubbo about what
time amala point i'm two people sir
referring to is a depression and then realizing the level of react reaction
that was necessary to it
yep it's certainly really wasn't i call the depression because old aunt and
uncle depression back then
nursing out
however the one of the major bad thing is to humans they would come up with
uh...
uh... soft astounding alternatives to take off for the use initially
all of them is called a been mandated a recession is called the depression back
then
can cope with great britain
correct oppression indeed it was a thirty five thirty six at that period
and took me to look through times is for general period for example
uh... there's no reference to interpret tour of the great depression throwing a
party
in month the second world war it started to do it the study coming into
hint that protesting abortion come into usage
to distinguish for previous depressions which were nowhere near here that one
writes the realizing that this is a unique is out or at least a unique in
that life time of the people who are alive at that time
uh... number promptly at the at bat
that was only in retrospect did you think that this
great depression the were in right now and would you call this a great
depression
uh... will be recognized in retrospect or do we have the ability to recognize a
for what it is right now and and and and what's the what's the criteria that you
would use to to say yes this is a depression
well put it this way we do have the capacity to talked about properly
dot financing capacity would only have a handful of people actually have any any
understanding of what caused
the crosses actually have on the one one of them are not the only one people of
michael hudson for example
uh... and therefore since alone are others who identified this as
not your ordinary recessions something therefore hash if that's what
differently
cause to think that is the great depression though
just reply can drop off but as one of the uh... empirically oriented
near preferably coverage that the comment i have some time and respectful
taken of that week spoke on into the great recession called the great
contraction
and that in that sense are you doing anything illegal but but the great
depression and has experienced a great contraction
and what head when she died in a five-page causal came to the root cause
of the crossing but this is the sustained
reduction in the level of product id
after that part of that is with rich unsustainable levels previously
the great depression this to give you an idea that that's
uh... had a
little id at the very product at that
take a two hundred and thirty five percent of you a pain
but i was up to two years of of uh... deflation after the start of the process
it began to the level of hundred and seventy five percent of your they pay
one for hoping that i have an ipod run in the end of the second world war
because it
but at the great depression would the second world war
uh... the death of a bank and the forty five percent team of modern seventy five
percent of a paid a forty five a tentative date
and then the whole thing start of all over again
we have gone from *** came in about three hundred defense yet
uh... before you continue with the district on he said then the whole thing
start all over again to start all over again in nineteen forty ministered all
over again in the nineteen eighties and nineties served for the two thousand
the wanting to be but wanted to say when we actually got into the speculative
bubbles section of the flickered across as we're now in
uh... that that from the sixty-two quite ripe ok humbug adding up to the uh...
should not infer that thirties experience
the debt levels by down so far
uh... that we've got a couple other what demaree others have been a sustainable
and sensible level of that for the american economy at forty five percent
of your effect right singapore's i wasn't some so then their current day
you you were when this is where you are going
interrupted you my apologies yet memoirs i thought you got the treatment of ken
is now full into about two hundred and fifty percent
now we've had other incident in the past with the devils rishta taken temple and
back a bit
so then in nineteen seventy three that we had earlier while two percent folder
level of the compared to j pay profited
uh... they're not in not is that you had a more substantial poll
ballot that got me that number the venerable while we talk
but uh... you had a fall from the state funding of the order of them
hand-written
seventy percent down to about a hundred and sixty five percent but this time of
gone from three hundred attempts to two hundred and fifty minutes in the
ultrasound book
item in water and be a time period
over to your part time period we've yet
we've we've dropped off fifty px
fifty percent of g_d_p_ in terms of private deaths
that stress opt
you that's beyond that spring radical as pretty dramatic
uh... gap
so are you suggesting that we need to that we've gone from three hundred
percent more lessons of that it's there
objet re times g_d_p_ in terms of private jet
students you
to half lines
g_d_p_ of private debt
and we will be out of this depression and so we get down to watch
about one one
one-time shape a about about about
fifteen trillion dollars on a percentage a_t_p_
and i know that our twenty trillion
that'd their product that little america think that that forty two point three
trillion dollars
it hadn't been paid on a small amount or whatever the common execute becker that
once
even agape is not growing
it's going to be it
letter you had that uh...
uh... increase in the denominator their pressure of a dedicated paper but at the
uh...
at the top level
you have
uh... the did the devils but being reduced
an actual times
so
that that
the common action to get him and then you ratio for her about three
hundred-percent too
two hundred and fifty to two hundred exact
right that's right he's got to get on to a hundred percent before were not in a
depression anymore and at the car rita d leveraging m uniforms were dropping
twenty five percent a year
and we've got another hundred and fifty percent to go is another five years
something like that
uh... five to ten years or just looking to detect it is now treated that
three hundred one person in nine in the beginning to spread this recovery march
of two thousand non
and fought for the two thousand more that the other two sixty percent three
four and forty percent
over two years
what should we be i think when you get so that the love of the around about the
uh... one hundred percent level of j_p_
your out of the woods in terms of not having a massive amount of speculative
that store on the books
and do you think the people reducing made it by reducing their consumption
and investment
will be over but that could take up to ten years
co
we could be in the suppression now it which is going to get
a few seconds here before the break is going to get the demo continue our
conversation news is this going to get worse before it gets there is this just
debbie awful for a while
augustana stated talk a little bit slot that works because we've been delayed a
growing economy to resolve a growing population
and if you have a population we need right along with one or two percent per
annum
and you have technological improvements occurring at a better rate of about one
percent increase in productivity per annum
you need to grow at three percent completed grandpa levels states steady
if you instead have uh... the impetus for the investment get it taken out of
the economy
then you get a look at being about scrutinized existed percent rate of
growth let up on the final slowly creep up and that's not pleasant for anybody
else actually circle does sliding backwards
uh... talking with professor steve teens assume president alex in finance the
most u_s_ has sent you the authors debunking anonymous uh... economics
his website death deflation dot com check it out we'll be right back at the
president's different
this is the cuma hartman
that d_d_t_ deflation a_t_f_ l_ a_ t_ i_ l_ and dot com this professor teens
website really check it out
now this is a keen still with us
yesterday okay great
at the bottom of the hour there will be uh... s
instead of break where we actually
both you and i stopped talking and and you know when all of our stations cody
either a commercial stations go to uh... commercials are noncommercial stations
player newscasts
uh... at right now our commercial stations are in break but all are
noncommercial stations are with us and all of our viewers on television still
with us so we we have about half our audience right now
uh... anything we say al i'll try to summarize repeal we come back the
streets break like is gonna last
about five
four-and-a-half minutes without so
how did we get here
about uh... we go up to you by rebecca demolition the financial sector
and we have a lesion right back to the defied a effect on the forty five
right back with us and the bretton woods agreement
and the way a reconstituted financial optimistic and will call for the great
depression in the second world war
because
were two things are internationally we allow the american counter to become the
international as a county and that really fed up things incomplete
nationalism for a full at some point which would nothing with that
madison countries that we are bretton woods wasn't
yet but britain which is a retired people what was called kind this planet
britain would involve using
oracle special drawing watchful all international tried so you're not leave
i wanted to but you go to violate the new addition of my book off me
australia then uh... then i would be
attic and that of the justice in american dollars
to may give you a few feet here at the bar special drawing lots
right um... off your central bank
and then should pursue made online travel back to my private bank with the
competitors indomitable could go back your way
that was kind is the idea of maybe we could have international commerce
without relying upon the national currency and what we're going to bed in
stayed on the caribbean merrick and delegation wanted the american goal of
the day the reserve currency
uh... we've got to the level now where
it any other country running a trade deficit was forced to control to call me
back in the days of uh...
fixed exchange rates
the american republic print more dollars so he died at uh... at getting date and
the potential to the vice the country and that certainly what's been happening
but that the international stop a father on that'd which more change regards
focuses on
what i'm concerned about it the domestic arrangements
and the real cause of any any bubble activists his people borrowing money to
gamble in rochester crosses
and by the act of borrowing money actually drop yes across it off as well
to get called when engineers call positive feedback loop
skymiles spiraling up-and-down and well edit everything for other people
borrowing money gap on the part of ethics and by by the act of borrowing
money in buying access with borrowed money
the drought of the *** to keep it
it's a positive feedback loop which works upwards but also worked in
opposite directions remains a positive feedback loop with negative
trajectory when you get the stage where
people do the people that want to take in more debt on for that particular
engine shop stops
or the ready trying to get rid of that process turns around giving it a
negative feedback were falling asset prices
but of course and a caused by people who saw them to reduce their debt levels
right and it came through and that's process
that that that is the deal ever jeanine r_u_ and and and bust the depression
the in falling prices
and yet we're seeing rising asset prices in a time of the leveraging or is that
some people moving their assets into a small category things like gold and food
and uh... or speculating on them
this tillage tool that the latter because
one thing which actually happens as it happened dramatically this particular
baffled by that and that i can differentiate the great depression from
oswego turn out to muzzle brake sessions to contractions
pang is president of distribution of this very different they've even private
there's not much auto south registration file returns for the israelis level of
this process that he was less
unsigned let will recap this in just a second i think when we come right back
from his son's well understood
it's online programs but u_n_ park by solar world
solar world dot com for information
on solar electricity
defend america eleven master section welcome back out here with you were
talking with professor steve keen associate professor of economics and
finance of university western sydney head talking with us live from australia
respond the middle of night
and he's the author of debunking economics is website debt deflation
uh... dot com and professor team
quickly recap you're suggesting that
these scenes of the of this
second great depression were sown in bretton woods nineteen forty five with
the u_s_ dollar becoming the reserve currency the world and that
this
depression is different from that of the nineteen thirties because this level of
private debt the unit in a fight is being
three three hundred percent three times g_d_p_ and is now drop down to two and a
half percent over the last couple years
uh... does produce in the depression
that that is fundamentally different character than the level of private debt
at the time of the last great depression how is that
ananda headlines characterize accurately this summer here
dishing out
uh... when back in the nineteen thirties the
committed with a little aka taking before tuesday flexion began taking a
two hundred and seventy five percent of a pain
uh... from that point on the level of debt refuse
nominal detection feral but the ratio jiji appear as a cause of deflation
prismatic d_d_t_ was collapsing
they do take election so that process project going by the up up to indict
attempt a temporary them
as well as we allow for for the much the find level so he had this
if you look it over the ratio of debt to j paid only the none on the night of
describe uh... buddhist collapsed sr
and that that rev up the russia even though the the the new wave of also
fought
uh... now
gate was we had to be a hundred and seventy five percent in total
about a hundred and twenty five percent was province product sector
non-financial businesses spend shops many if any of those gone yeah so when i
found himself that they will process beginning
they had said that there aren't her there and there and it not that
you know that that was their debt level of us who constraining there
capacity to spend well they had to pay their debt down in the first response
was to try to improve of their market share by cutting their prices
because they'll cut their prices
and if we got a good blue cross is still part of the business has replied
and having fisher
expressed his mother called fishes paradox is that the more the dead is
play
mall they are
now that's what gave us the really really shop downtown
this time around even though got one
britain roughly one point seven times as much debt the debt that the taken across
the three hundred one conservative davis's
one seventy five
that didn't use only of the belly that seventy five percent of the edits pete
was followed by
non-financial businesses
the rest with a
by the household sector and bio uh... the finance it
nanda healthvault rather than having a victim of the debt levels but from a
viewer twenty five or thirty percent of your they pay
after the great depression
haven't almost a hundred percent now
so it's not that produces a marie telusu addictions trying this time around
if the customers
and without customers you have no connie's that's why you're suggesting
yes
that we should
we should consider uh... love that it is twenty five ten concentrate the fiftieth
year proclaim liberty throughout the land and all i have it as there are
others should be a jubilee onto you usual richer in every man on his own
clan
uh... every man and his family falling inland is obviously freeholder
free the slaves equalize everything
that pumping
we have to do more than either the late week on doing all cash coupon
unfortunately uh... because
back then of course the dennis what do you know very obvious cloth of people
who would get slides
and a very obvious caught the people who have money lenders and landlords
and
you could easily have been a minute reduce the power of the money lenders
and landlord by doing this
but i was politically bottle because otherwise you're going to have an outing
and uh... you it's only going to have a favor slave revolt
uh... so it easy to identify who should supper and quite often the money lenders
talked about having a brought into the air cub
starting roughly around the uh... the show all the little
uh... that doesn't happen anymore not committed in the nineteen thirties
version and i would i'd gotten another to the bank holiday period under under
assault by the critical pharmacist this happened during the back over that
born of debts were just at the bank level
yes in that period missus setting it all the various install plus must roosevelt
created a federal agency to take on household dot
ineptitude to buy household that's outer banks and and give people federally
guaranteed loans
living in a letter that they can come to the bank now but if you do it now the
trouble is not only the banks and the non-bank financial sector beautiful by
the way pick two hundred and twenty percent of genetically
this is a trivial level back in the great depression
read rather than the shadow banking perfect i think the only one to stop a
they've sold those products to were diverted to rebuild america
yes it's to have lunch pension
standpoint song
that we actually abolished the dead
we wouldn't just be affecting the banks malady affecting people who bought
products off the banks
race and not
and america it's all over the world all over the world amended that one of the
very first price is the proper hoping for the council of norway
when this whole damping began with the baby on its way to the bottom triple-a
rated
bums out by uh... at the american values are still some in our own bankrupt
speakers stated bought the stuff from goldman sachs
in good faith
further than we actually trust these people a potential thing about money is
trust
or who have been actively abused by the financial sector
but if scrambled the expo completely that i'm scrambling at
is really what we're having to do here so one minute and celebrates in that one
minute it quickly and we'll who can see the conversation after the break the one
of the break
how we do that
whittier
have to find a way of re-balancing the system proving fundamentally credit but
it's money
to from this transition at least fundamentally stereotypes
without
uh...
what while still providing cash for those of insight is rather than the
commandos
is that it would be would there be a variation on the the moslem notion that
and what used to be the the biblical notion that you shall not charge
interest really only charge fees for banking
not knowing that people are not particularly uh...
identical charging interest
morphine drip of loved principle that's been extended which which plat
there that the whole would principle implies what's gone wrong because
principle principle
it may be done in responsible responsible behavior
but if you respond to increase to the level of debt outstanding
and we have to find a responsible way producing at ok and we'll talk about how
that can be done after the break
we're talking with professor steve team he's the assistant professor of
economics and finance at the university of western sydney the author of
debunking economics his website death deflation dot com line could you check
it out
and we will continue in about five minutes you with us on this issue
because the city
sticker
six
it
has so many questions about this
spectator crazy we're talking with professor steve keenan said the motor
jiju associate professors
professor king of po professor of economics and finance at the university
western sydney the author of
of the brilliant book debunking it economics and the website debt deflation
dot com a twitter at
steve stevie teeny kiki
and you still with us
yes indicate rate uh...
first of all
you know we we we broached this the topic of the death of a jubilee and i
want to get back to that in just a
and how how that might be done in a way that's
politically
not just palatable even conceivable but first the we began this conversation
uh... thirty minutes ago we you point out that the ratio of private
not government debt but private jets g_d_p_ um... had been around a hundred
thirty five percent of two hundred thirty five percent at
promote the great depression and then i got the leveraged under forty five
percent
and then and then it hit three hundred per se
more uncertainty
she doesn't eight and now it's the leverage down two hundred and fifty
percent but it still has a long way to go
uh...
what all that and then please at any point correct me if i'm miss
characterize your miss remember anything you sent all of that said what role does
the stuff
that in our political dialogue here in the united states everybody's hysterical
about in word and we're hearing the european union is all hysterical about
particular right now with italy and spain what role does government
play in all of this and what role
trade deficit the trade debt playing in all of this
the government that fundamentally axes a maybe we should act
and has in some ways and in the past decade polemical anesthetics stabilizer
and they conditioning system but like you are in this together hating
uh... which we did on the private sector you having a having a bit him than the
government sector quickly chills the return by
bridge by running a surplus
i've been taking money out of the economy
and reducing the temperature when they when you have the other direction when
you have a swamp
by the product they could further interest rate in the gulf and uh... the
opposite direction and that sort of
the desperate or just leaving any up with a air conditioner runs in the
reverse direction to the
initial level in a room in a similar sort of an allergy can apply to help
the government a cadet generate a hiatus
assume gains we are where right n indian
uh... insane the the private sector is collapsing
so really heat up the public sector we're going to borrow money and spend it
on on hiring people to to plant trees yet now the trouble is a good part of
our people did it it becomes a responsible so they become robbing
perspective is down there
you know that this type than the money in being irresponsible if it's a trap
uh...
white-out look at it is to job id economy parents whose fundamental
sources of money for what
the command can be delighted to be the turnout refining politically mature
status grew up in the actual stock of money
and there are two institution which can generate more money
one of the private sector by winning money to uh... businesses and
individuals
the other is the government by running a deficit
and what do you have had that in this uh... the but what's called personal as
bob woodward prior to the crash beginning
what private economy enormous amounts of money in finding the private sector
started the product explaining to the private sector
bonding
gambling on asset property three houses of course in america
so i gave you a foot faults but im
but of course you to fill that all spaniel but by and large numbers of
goods from china
to fill both very large empty handed their babies you g_o_p_ american house
into a building
uh... so you wanna trade deficit as well the same time
that the nursery factor that affect the amount of money in circulation to the
money would
lunch you were taking out in america
weakening converted into renminbi
uh... to buy goods from china
he had a double leakage going on there
but i've got the courage of free trade outlook adding title i didn't want
system and then drill down
international county makes it that much more complicated than people dead baby
of mine it's not just in the last i'll try to do it on a telephone conversation
at the did but i think nick isn't this look at the relation of the product at
the date and public sector that
statement growth in both of them
changes the amount of money in circulation
now if you have to put the the private sector
private sector
i'm actively delayed virginblue doing now
but is actually taking money out of circulation the amount of money turning
ever maintaining economic today is falling
if the government that uh... attempt to run the septa surplus
they would be doing the same thing you can always do you say that when the
government sector saxena
at central surplus
that another way of saying that would be if the government sector tries to
practice austerity if it tries to cut back on its spending his i mean you know
were so far and that there's no we're gonna run a surplus that's if we have
last debt if we come back or that if we do what the republican party suggesting
that's gonna be contracted as well as the d leveraging in the private sector
is contracted you add those two things together and you've got a horrible great
depression gave the
m_i_t_ am i saying in plain english what you're saying is an economist
depicted devoted a trip let's make a quick yes you're right directly and it
would be people would get a hard time getting hit on this because
they came to think you know that they're very
uh... across time
uh... the book with uh... what what scholar buckles static rationing
but that book through time and i think in a dynamic sense because
but they described as an open think about it not helpful pop analogy when
you've got
and much more complicated than if you could have been an economy is and i
think well if i'm running a deficit i've got to cut back on my spending and
therefore that they want to get brought my own system is just endless
and therefore that applause at the national level as well
what effect record in the process is the level of that you've got into i think
about it even has a household
the situation can handle that one as you can spend less
the other you can work a lot product
if you actually did the previewed by whatever appeal the american sense of
enterprise
the best way to get outta trouble thus the work product
rather than disbelieves spend less right in the end the analogy here for work
harder
immediately that his economic activities where
is have more to my pic
more government spending even though it's done
with dept
yep oil because here you can give you
at the private sector is cutting the level of spending
then you've got a huge debt burden
and if you actually talkable save more money
what that really translated to slow down the road circulation of money
i'm slow down and out of economic activity it supports
while trying to reduce the debt bubble
what happened to the russia if you do that your economy force was down
you get over amount of time it'd bitten actually gets worse
and this is an is this why the u_k_ right now is sliding into recession
because their duties while you're here you're europe actions by the time
uh... so thought that would apply the metric treaty which
fitness and popping up in many ways to quote
england not paying part of that it shows that austerity payton without coming is
cheaper than the master trading austerity actually push you back with
them each time you tend to do it you end up with a bigger debt problem anne had
beforehand
well i insist notions that you can somehow cut yourself to prosperity
apartment that broke fight it because uh... unfortunetly totally uh...
inciting theory of economics
which is
said officially plausible
but fundamentally in time
has taken out of the public profession don't tell him i'm not afraid and that
is
and and that was on the system has become part of how we all think
including politicians
about this problem
and it actually obscured the complexity of the maker of the carrier complex
might capitalist market system
and latest bank inflame decisions
again if i leave you now if you could not be aware of it you know the driver
he going around the corner
uh... most of the three go to quickly will fought off the edge of the road
because of the actual reflexes uh... turn into the correct it and we're going
to stop supplied
a professional drive and i should turn the will in the opposite direction
now that is part of all we're talking about here because
a sound simple to play if you're running a deficit uh... amy increasing their w
should reduce your spending until you get off
but after that like i mean you will toward says account getting out of
control
if you got it in the opposite direction to regain control
writes and then
eventually and i don't know the united states came out of world war two
with a public debt
there was a hundred and twenty seven percent g_d_p_ if my recollection is
correct that's pretty much accurately and and we paid that down to
within ten or fifteen percent g_d_p_ within a decade
without any austerity whatsoever that we did the exact opposite are truman
eisenhower were spending like drunken sailors building at the national highway
system hospitals schools bridges roads likely occasions infrastructure that you
know a bit of a david at on and i dont
emptied grew the economy so much that
x revenues increased and we pay down our debt now when i pointed out why can't
politicians whether it's david cameron in the u_k_
are or paul ryan and and john bainer here in the united states or for that
matter brock obama look at that period of time and say
jeanette worked pretty well and we tried that
or probably one of the rigidity wouldn't be it's easy to do then is it and now
that was then
if in fact and of course product that we should
ballooned out of control in the nineteen twenties exploded with the deflection
the thirties and and falling back down with that
with the government uh... stimulus packages
of the late nineteen thirty two and the impact of the second world war
phone back to forty five percentage of the paper
that was a lot of a not causing any particular problems envelopes are
arriving at the same time
which is in that we would rising debt is not a bad thing when i put that rocking
the family fun financial investment
they have been incredible industrial growth of the american economy in the
post-war period as well
so you had it been bitten on covering the system
did rocking defying legitimate role to some extent inducing investment and
enigma government sector
boosting spending and that unplug the infrastructure which date you more
productive prop up the kiddie begin with
this time around your counteracting the biggest level of daily briefing him in
history and that delay bridge on the eve of the government run large amounts of
money and
this money being plucked out by the private sector daily routine
more than counteracts at again if you look at the capital of debt
of the pre government
government debt has risen about thirty thirty five percent o_j_'s decency
process again
these forms by the senate that is what this is forty five fifty percent so even
with the government stimulus coughing up system by about thirty five percent of
if they processes dip into about forty five percent women make it through the
maze mom
and he said that the fastest are the worst erase the leverage in human
history like it back to that and back to the jubilee awaiting sharp break we'll
be right back sports tested
you're listening to them some armed men program visit some hardman dot com for
audio and video market
which i dr steve keen professor of economics and finance university western
sydney the author debunking economics is website death deflation dot com
and welcome back dot if you still with us
windows they have a good uh...
again our par commercial stations of leftist uh... to play commercials but
everybody else is still with us so arm it be
i would like to brief visit just for a moment i i i want to get back to the the
the
esti leveraging will do that right after the next breaks that everybody can hear
at but i'd like to to revisit this notion
of out
you know why is it that our politicians don't get this she said this is insane
school of economics it was this the this is the milton friedman chicago schools
that we are talking about the activity of the developments in the loop greater
problem is there any reason that it is success is the stickers
but i can send it on the level
which i uh... expose
uh... their political muscle areas the dogs on a cash in the new addition to
talking economics
uh... but that mindset dominates how politicians and economists think about
the economy which is why
the vast majority columnists who called me and their practical common had no
idea sconces is coming
and uncles will not have actually hits
only the mavericks like myself who rejected this period
decades ago
sort coming because we focused on the obvious thing that i got back to the
pawn including
uh... rob obviously probable of product at
sis that that that's the bottom onto the back of the economy operated belief
economies fundamentally stable
and also spent a lot thirty or forty years denigrating the role of government
sector
and time the government spending does not good at all
behind closed doors
uh... some of the advice these economist to getting to the government now either
austerity is actually the x_ expansionary
and their logic
andy so i think we would like to contribute to the english language but
i'd like to go to the following line
as say that we have the
we all have the capacity for rational thought
identify rational for the appropriate capacity to accurately prophesies the
future
plus and within that hope that if we do we know the government going to reduce
it's spending now
reporting that the dow taxes in future going to be less to pay for that
spending therefore were willing to spend more
developed the government's reduction in spending they fiscal this reverse
regarding equivalents when i was too much of a mouthful like trying to to
expansionary fiscal consolidation
it's actually the pop the poor old cameramen salt the veto but if you cut
government spending the economy will but i a m
we'll look at cameron right now
achi symptoms but the people of god have been called behind closed doors and this
is
sis to choose ascribe any of the
studebaker colonel would be
crazy talia okay i have not been exactly did you know i did it but it will end in
mind that the committee today talking economic little
revelation occurred to me and i felt quite right about this type of it's
become a thing
neoclassical economist
stunned understand neoclassical economics
attended another on school of thought overnight
the jump into classical school incomplete
put some deliberate father's name to this
i mean even even a kind of message so idk reaction which would be theory
comparative advantage right i'm going to get out of college crime sure um... even
that that was far more that logical
then decide you're good for the so-called regarding equivalent so
at a later point some of my paul krugman call themselves new kind g_m_'s
on sorry is not a clue what kind of home about
you know they they abuse the language and they abuse history by replying libel
participants children must learn how to read kinds certainly have a good product
yeah and and and and understand around period school of thought
let alone does today as they sometimes marin lands from yeah and and and and
then they go off in court adam smith and they've never read his sister is suffolk
on some moral
all soliciting cast mostly death as their grant which you know trans
list
uh... but the way well five indicates that we're talking with steve b steve he
will be right back her professor steve king planes
sis
salamat talking with professor steve teams professor of economics and finance
and western university resources sydney the author of debunking economics
brilliant book his website debt deflation dot com on check it out
professor keenan the six months we have left your more or less on is money just
throw two things out and let you go adam
used you made the comment before the last break that were seen the most the
largest of the most rapid i prefer to your phrase you can correct me on this
uh... deal averaging in the history of humankind
sent chills down my back you know it's like yeah okay does that mean this is
going to be the worst oppression in the history humankind he's again ago
international is going to be the kind of thing it's gonna like lead the world war
two like we saw last time and secondly we've been talking about jubilee uh... i
would love to hear your thoughts on how some form of debt forgiveness could be
done me here in the united states or internationally that
politically viable
sonya or that they are very quickly to that the posted
the reason the leveraging hits
of the economy
is the total man in a credit basically is not just your income is income plus
changing this about changing that can be spent on two things to invest and all
speculation unfortunately the vast majority in the last few days had to
spend on speculation
therefore winds we because *** can get from rising too tall they can have a
dramatic turnaround in demand
and effective situation the american economy in two thousand indicts roughly
good g_d_p_ was about fourteen trillion the increase in debt that he was about
four trillion dollars so total spending in the economy on but goods and services
and put that house buying about this
with that i can't really in dollars box four two two thousand and ten g_d_p_ was
still roughly fourteen trillion dollars which the source of income is the
changing that was minus two trillion sickening and i can't really in dollar
economy to a twelve trillion dollars economy in about two years won't watch
the city
that than people
than that
do this or that continues happening you going to have further reduction
occurring by the time in demand and you're going to buy more slowly than
your population growth and rising unemployment on
the if they have to look at through the day that have been extended the actress
now is not what it might irresponsibly bartaman irresponsibly links
you go to repay the view look at where the real sponsored by the bottom of the
banking sector creating get
because it makes money out of itself for itself out of creating dead and clean
tossing out into that arriving at after crosses which the data so of course
the trouble is they've been on sold that date
buses cure transaction
throughout the population so if you refuse to do it
it also urges income anybody in the pensions game
you really counselling comes and so on so
monumentally damaging
to go colonel passion shivalik and you know more about the protocol the modern
jubilee
would involve
effectively quantitative easing for the public rather than the banks
than none almost none of money to get into the bank that
measures up to two five trillion dollars now being spoken about trillium
give that money instead to the public through their bank accounts and the such
a way that if they
maybe mexico individual
has bit than the money has to be used three stooges surrounded but at the
individual doesn't have that much beer company or a person that that doesn't
get stupidity the remainder its cash in their accounts
that would be in maine the people who ended have the death of a reduced so
david did beat the revision happens very rapidly instantly virtually but
simultaneously people who don't have that
have cash they can spend out of which compensate them for the fact of the debt
they are in
no longer has the same income stream coming in through it
and do you still be disruptive and you still have lots of bank that would be
effected by the quebec nationalist also fall dramatically but not easy
it even panelists there is not texting at the time is way out of this crosses
but something like that might help them it would be palatable is something like
that only the banks spirit basically yen yes delicately takes on the banks alive
but i've idris before with with the conservative economist
but that seven trillion dollars that was given to the banks wasn't a gift it was
alone and they've paid at that
pack and what you're talking about here is step forgiveness sets forever
yep we needed discontinuities what great how people depicted the rent
this problem has been a slow gradual continuous increase in the level of ***
lending money that didn't do anything productive what so ever just for that
gambled on house prices
then we've got the stage with at that level that it's i credit michael hansen
puts it
if it can't be replied want be repaid we've got a look at how not to reply
them what infected isn't happening people try to find a way to continue
honoring those debts
that they want to maintain its continuous process we needed
discontinuity
well thanksgiving that bank want do it
and and this can continue in the death is what's going on right now is it not
where the announcement today that five different central banks are going to
help bail out the european community
yeah i figured that it to the bank themselves pegasus continuous-time
process
the great energy that go to do it before the reduces profited by running cli
the economist in charge of the central banks don't believe product that is even
an issue and the economy still even after the empirical evidence for the
last two or three years so they would be giving it to the
uh... to the to the to the to the uh... banks
or providing his lunch a couple pics but want the government to reply
ordered astronomer and having continuous process when the discontinuities native
salvi these economists in europe in the in the european community
art as crazy as the republican comes here in the united states miserable bank
bill got told by my but also help them
milton friedman
uh... hello mary and that they did a man and also i got called mescalero
aunty phyu phyu you have to rate the supplements textbooks to believe that
anybody can be so nazi
let's just take the stuff seriously
which are ready to begin the backing of an acute gesture that and write a child
but because bill clinton assigned kuwait effectively the robo preaching the same
jamestown religion
so at only when they break their grip of those people on
economic theory would like to get anything even vaguely sensible thing to
just to the politicians
and and engine jones alive and well
all over the world effect this is a bit it seems uh... that we're we're just
about out of time i think we have just yeah just a couple second so i just i
want to thank you uh... professor king so much for being with us today uh...
it's it's really an honor to speak with you
thank you very much some blood as i'm going to print a copy of that
the condition of the vocal as well i'd look forward to it and and in fact i'll
pay for it we can do that whole central bank we'll do it
fortified but let's take objective flourishing dot com is professor teens
website dei bt deflation bfl eighty ireland dot com just like it sounds be
sure to check it out his book debunking economics as well