The Debt Ceiling, Fiscal Policy, and Monetary Policy
I also read the book, it is great and highly recommended.
In my opinion monetary theory is akin to voodoo. Our economic system is predicated on continuing growth on a finite planet. banks manufacture some 90% of our money through loans--there's not enough money in the system to repay all the loans and interest.
Every dollar loaned out will be used to purchase services and goods that require energy and materials that ultimately derive from the Earth. So, these ever-growing, manufactured dollars will ultimately deplete the planet. The biosphere is collapsing as I type. Some people suspect we passed peak oil in 2018-19.
We actually need structured de-growth, some geoengineering, and a return to small, localized economies to have any hope. This will not happen, because it will require cooperation on a global scale and decreased production of goods.
Let me close by mentioning two wise folks. Tim Garrett pointed out the civilization is a heat engine. So as we run the engine will indeed heat the planet. Al Bartlett pointed out that the human mind's inability to grapple with the exponential function was a serious problem. These gentlemen are correct.
Most economists worry not about thermodynamics and ecology. I guarantee that the markets will not grow indefinitely. I am 66 and I believe there's a decent chance I'll get to see the collapse.
As always John your essays are thought-provoking and a blessing! Thank you.
John, thanks for delving into this. After reading your piece, I read a number of reviews online, and they certainly split down the divide between the Friedman/Chicago "school" and the Keynesians, in terms of governmental economic theories. The heirs of Keynes are the (only?) proponents of MMT, and the Chicago school folks, including Friedman himself, argue against governmental functions that I think are crucial to our society.
Nonetheless, it seems to me, as a non-specialist/ignorant person that, given the fact that the "experts" are so strongly divided, we're left with little way to evaluate what the actual results of either approach are: that is, even measuring recent history (the last 100 years) in terms of these approaches is quite difficult.