We need to put pressure on our RBA to at least create some of the money to equal increases in productivity + inflation.We have a $1.8 trillion economy.Inflation + increases in GDP = $108 billion pa.Presently we borrow this from foreign central banks who just create it with the click of a computer mouse.What's wrong with the RBA computers? In 2009 Prof Michael Hudson went to the RBA and asked this very question.

The RBA should at least create our inflationary money of $54 billion pa since this represents the depreciated value of all Australian's currency.

Steven Keen.Don't forget to view "The Secret of Oz'by Bill Still DVD I sent you.It won the Biff Award for best documentary 2010.

Yep,

Quite right.

And I would like to refer readers to an article Prof. Keen published in the Australian Economic Review:

Household Debt—the final stage in an artificially extended Ponzi Bubble.

http://www.debtdeflation.com/blogs/wp-content/uploads/papers/KeenHouseholdDebtIntegratedFigures.pdf

I read it with interest at the time. I hope so has Glen Stevens.

>>In late 1990, Australia’s private debt to GDP ratio peaked at 85 per cent. It then fell to 79 per cent in mid-1993, only to more than double to a peak of 165 per cent in March 2008. This literally exponential rise in the debt ratio masked an important change in its composition. The business ratio fell sharply between late 1990 and 1995, and only returned to 1990 levels in 2006. The household ratio, on the other hand, rose at 6.6 per cent per annum between 1990 and March 2008, while the mortgage ratio rose at 8.5 per cent per annum.3 This took household debt from 30 to 99 per cent of GDP—and mortgage debt from 20% to 85% - in just over 18 years.>>

See Also:

WHY THE DEBT TO GDP RATIO MATTERS

http://www.incrediblecharts.com/economy/keen_debt_gdp.php

>>So Australia has avoided the GFC by recreating the conditions that led to it. Needless to say, this is not entirely a good thing. We are potentially avoiding pain now by setting ourselves up for greater pain in the near future.>>

For those interested in the history of debt deflation theory this landmark piece by Irving Fisher published in Econometrica in around 1935 is still worth reading:

THE DEBT DEFLATION THEORY OF GREAT DEPRESSIONS

http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf

As is this piece in the Economist:

OUT OF KEYNES'S SHADOW

Today’s crisis has given new relevance to the ideas of another great economist of the Depression era

http://www.economist.com/node/13104022

Like so many great thinkers – notably the notoriously bitchy Isaac Newton - Fisher was not a “nice guy.” This from the Economist article linked above:

>>Fisher was born in 1867 and earned his PhD from Yale in 1891. In 1898 he nearly died of tuberculosis, an experience that turned him into a lifelong crusader for diet, fresh air, Prohibition and public health. For a while he also promoted eugenics. His causes, both healthy and repugnant, combined with a lack of humour and high self-regard, did not make him popular.>>

Nonetheless I would call Fisher one of the great neglected economists.

Steve Keen, as the Associate Professor of Economics & Finance at the University of Western Sydney should know better than to use the word "gotten". As past participles of get, got and gotten both dating back to Middle English, the form gotten is not used in British English but is very common in North American English, so states Oxford Dictionaries. Far too complicated to search for a comment from any online Macquarie publication for an acceptable Australian comparison. However, with its predilection for slang, Macquarie may have it covered.
We are right to have removed some of the pomposity from our English heritage but when we reach the stage of using such common-use Americanisms, we are going downhill faster that the US is at the moment. Let us retain something of value, decent speech at least.

And a University Associate Professor to boot. What next?

Then when we see that the good Mr. Keen is a member of another of these great unknowns, like Policy Centres, Institutes, Foundations and on, this time the Centre for Policy Development, one immediately becomes suspicious after having developed a level of paranoia about such organisations caused by past experience with evil and devious groups masquerading under many names with very questionable objectives and often unpatriotic motives, even seen on the respected pages of Online Opinion. However, for those interested, seeing the first comment today from Arjay, as well as knowing that Bruce Haigh has been a regular contributor to the Centre’s earlier name, NewMatilda.com, has established the worth of the Centre for Policy Development to me and hopefully to any other suspicious reader of like mind.

I do trust that on this one occasion, our editor, Graham, will excuse the fact that I am not truly “on topic” today, the subject matter being well outside of my areas of expertise.

I just dislike the word “gotten” and have never seen it in print in an Australian publication before, thankfully.

rexw,

I think you might have gotten out of the wrong side of the bed this morning : )

(Btw, I think you'll find that Graham will be happy to take responsibility (and twenty lashes) for the heinous crime you so describe).

After all, the GFC is a mere bagatelle in comparison with questionable grammar!

I'm not a grammar Nazi. I may well have used the word "gotten" myself. We all quite frequently refer to "ill-gotten gains". Nothing wrong with a little anachronism or archaicism from time to time so I have no quarrel with Professor Keen.

But while I find grammar interesting this discussion really is off-topic. I'm not sure why the CPD should have got pulled into this either. I don't have a problem with the CPD, anymore than I do with Per Capita, the CIS or the IPA. Articles have to stand on their own feet and we try to represent all points of view.

I find a lot to agree with in Steven's thesis, and this is one article I sought out. Until we realise that we aren't going to get substantial growth until we significantly deleverage we are going to see increasing financial instability - good for speculators, but not for the rest.

In my view we essentially brought a lot of growth forward from the future, which now has to be given back as we unwind our debt positions.