It should be noted that the school of economics that Steve Keen ascribes to is currently being attacked by Republicans in both houses of Congress, as well as almost every mainstream economist with a podium and anyone who will listen and the majority of Democrats who follow the Clinton neoliberal third-way philosophy.
Modern Monetary Theory (MMT) can better predict our economic future because it accurately describes how our monetary system functions in real time and real life. It is apolitical in that it doesn’t prescribe any political view beyond stating that our economy is functioning far below its potential because so much latitude must be made for erroneous assumptions presently.
I find it amazing that the US economy functions at all considering that more than half of politicians want to remove all currency able to retire private debt from the private sector by paying off the national debt with austerity and taxation. It isn’t even important that doing so is impossible for any net importer because even attempting it upsets the balance of debt to capital so badly that immediate recession results. (Every damn time isn’t a very scientific term but it suggests causation to a high degree)
This causes automatic stabilizers to kick in and run up deficits/debt even more until sufficient balance is restored to allow the nation to go back to limping along on ever decreasing personal credit. The top earners will, of course, save come hell or high water, and saving can only be accomplished with the dollars created by Congress in excess of taxation.
Between vilifying any such spending as the devil’s work, allowing massive wealth accumulation, and the double-edged sword of a trade deficit the American consumer/worker is simply left with no “real” wealth and earnings that can supply a dignified lifestyle, much less saving or retirement. I spend a considerable amount of time attempting to disseminate our monetary reality, but I also fear for our nation should the average gun-toting American discover that their taxes never directly funded their government and that the holy grail of a “balanced budget” is just another way of saying “100% tax rate” and the theft of resources by their government.
The spark that will likely set this tinderbox on fire could come with the debate over the sustainability of Social Security when someone notices that none of the payroll deductions for the program actually “funded” anything and that the government could just as easily pay benefits to retirees without them. Ditto for Medicare. That’s a big chunk of buying power taken from the working class in the most regressive tax in history that was simply applied to the debt and zeroed out with no participation from the investment class. Such is the stuff of revolutions.
