Steve Keen

And by the way, you owe us half a million dollars.

So they've created debt and created money at the same time.

And that becomes part of spending power.

So nobody borrows for the sheer pleasure of being in debt.

So you borrow to spend, and therefore that extra money that's created by the loan adds to aggregate demand and income as well.

And that's obvious.

It's very simple to prove mathematically.

I've done that.

But neoclassicals don't even look at the literature because they don't want to admit that banks can create money because if they do, the rest of their edifice collapses.

So they ignore the evidence.

I don't like the expression thin air for the simple reason it applies to magic as involved.

It's not magic, it's double entry bookkeeping.

And you'd think economists understand double-entry bookkeeping.

In fact, most of them think they do and they don't.

And I can prove they don't, again, by showing statements they make and show that they contradict double-entry bookkeeping.

So they don't learn this thing.

They start from the preconception that money doesn't matter.

They teach their students things like they call money neutrality.

So they argue money is neutral in the long run.

It can cause short-term fluctuations, but it can't change the aggregate level of real output in the economy.