What Keen ignores in his figures (9:50) is the fact that government debt becomes private debt because all of the cost of borrowing to fund deficit spending by government becomes the tax obligation (including any interest) for the private sector when the treasury securities that funded the borrowing actually mature. It does Not happen the other way around since private debtors cannot tax the government to pay off their debts because there is no law that allows them to do so..
Keen makes plenty of economic predictions most of which have not come to reality but are wildly off. As a sample of how limited Keen's understanding of the money system in the economy is he now regularly puts up a chart in support of his MMT beliefs which shows the increased deficit spending and a corresponding increase in private sector surplus. It is supposed to show that surplus is provided by government deficit spending. His chart his grossly misleading because it supposes that government deficits which are in fact funded by borrowing in every case create mandatory future debt obligation that future taxes paid by the private sector is created at the same time as the government deficit spending. All it does is demonstrate to those who understand the money system that he is short of good observation. When confronted with this knowledge his response is it is correct because his Minsky software he made himself shows it. No independent facts supplied to support his statement and no admission that he is or could be wrong.
What Keen ignores in his figures (9:50) is the fact that government debt becomes private debt because all of the cost of borrowing to fund deficit spending by government becomes the tax obligation (including any interest) for the private sector when the treasury securities that funded the borrowing actually mature.
It does Not happen the other way around since private debtors cannot tax the government to pay off their debts because there is no law that allows them to do so..
Keen makes plenty of economic predictions most of which have not come to reality but are wildly off.
As a sample of how limited Keen's understanding of the money system in the economy is he now regularly puts up a chart in support of his MMT beliefs which shows the increased deficit spending and a corresponding increase in private sector surplus.
It is supposed to show that surplus is provided by government deficit spending.
His chart his grossly misleading because it supposes that government deficits which are in fact funded by borrowing in every case create mandatory future debt obligation that future taxes paid by the private sector is created at the same time as the government deficit spending.
All it does is demonstrate to those who understand the money system that he is short of good observation.
When confronted with this knowledge his response is it is correct because his Minsky software he made himself shows it. No independent facts supplied to support his statement and no admission that he is or could be wrong.