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(Plus get Ravel — the economic visualization software we reference in this episode — as a bonus if you’re accepted and join.)

Top Economist Steve Keen sits down with Richard J. Murphy for an insightful conversation about why textbook economics so often fail in the real world and what to do instead. From the “theory of the second best” to the Cambridge Capital Controversies, from double-entry bookkeeping to sectoral balances, they unpack how bad assumptions create bad policy, and where Steve agrees with MMT on government money creation and where he pushes back on trade.

In this episode, you’ll hear:

✅ “Textbooks are teaching a lie”: how clean curves hide messy realities

✅ Why equilibrium thinking and perfect-competition myths mislead students and policymakers

✅ The second-best insight: removing one “distortion” can make outcomes worse

✅ Cambridge Capital Controversies and Samuelson’s quiet concession — and why it never reached textbooks

✅ Double-entry as first principles for money and macro, not supply–demand parables

✅ Where Steve aligns with MMT on deficits and money creation — and why he disputes “exports are a cost, imports a benefit”

✅ Climate economics under fire: why trivializing risk derails the response we need

✅ What Ravel brings to monetary and macro modeling (and what’s coming next)

Key insights:

• Start from accounting and definitions, not analogies.

• Sectoral balances are conservation laws: one sector’s surplus is another’s deficit.

• You can’t fix macro with micro parables; you need dynamic, accounting-consistent models.

• Honest economics welcomes critique — even of our own side — when the data and logic demand it.

What should Steve and Richard tackle next — deep dive on double-entry and Ravel, or a full episode on climate economics? Tell us below.

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Steve Keen — Website: https://stevekeen.com

Who are the guests?

Dr. Steve Keen is an economist known for accounting-consistent, dynamic models of money and debt, and the creator of the Minsky and Ravel tools. He challenges textbook myths with operational mechanics.

Prof. Richard Murphy, a political economist, author of the Funding the Future blog, and a long-time critic of the failed ideas driving our economy, known for clear explanations of how real-world accounts should shape economic debate.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the software discussed in this podcast — as a bonus if you’re accepted and join.)

#SteveKeen #Economics #DoubleEntry #RichardJMurphy #MMT #Ravel #CambridgeControversies #SecondBest #economicpolicy #economicrecovery #economicimpact

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen reveals how high-cost debt is crushing Americans and why current U.S. policies are steering the economy toward crisis. He explains, with clear double-entry accounting and Ravel visualizations, how private bank lending still creates most of the money in circulation, why government deficits actually increase deposits and reserves, and how open-market operations simply shuffle assets without generating real wealth. Keen argues that the true solution isn’t austerity but a Modern Debt Jubilee—a bold reset that cancels unpayable debts, restores balance sheets, and revives real economic growth without relying on the illusion of “printing money.”

In this breakdown, you’ll discover:

✅ Government Spending & Taxes: How deposits rise and taxes fall—what actually impacts Americans’ wallets.

✅ Bank Reserves 101: What banks can—and can’t—do with reserves, and why it doesn’t relieve high-cost debt.

✅ Deficit Mechanics: Why deficits create money and reserves, and why surpluses can worsen economic stress.

✅ Eight Key Entries: How government money creation works behind the scenes beyond basic double-entry.

✅ Borrowing from the Private Sector: The accounting myth that misleads policymakers and the public.

✅ OMOs & QE Explained: When these tools create real money—and when they fail to.

✅ Money Data Since 2000: Most new money has been private credit, fueling debt pressures.

✅ Government Negative Financial Equity: Why it’s necessary, but why Americans still feel the squeeze from high-cost debt.

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory.

Curious Minds, Engineers, and Finance Professionals will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here:...

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen reveals how high-cost debt is crushing Americans and why current U.S. policies are steering the economy toward crisis. He explains, with clear double-entry accounting and Ravel visualizations, how private bank lending still creates most of the money in circulation, why government deficits actually increase deposits and reserves, and how open-market operations simply shuffle assets without generating real wealth. Keen argues that the true solution isn’t austerity but a Modern Debt Jubilee—a bold reset that cancels unpayable debts, restores balance sheets, and revives real economic growth without relying on the illusion of “printing money.”

In this breakdown, you’ll discover:

✅ Government Spending & Taxes: How deposits rise and taxes fall—what actually impacts Americans’ wallets.

✅ Bank Reserves 101: What banks can—and can’t—do with reserves, and why it doesn’t relieve high-cost debt.

✅ Deficit Mechanics: Why deficits create money and reserves, and why surpluses can worsen economic stress.

✅ Eight Key Entries: How government money creation works behind the scenes beyond basic double-entry.

✅ Borrowing from the Private Sector: The accounting myth that misleads policymakers and the public.

✅ OMOs & QE Explained: When these tools create real money—and when they fail to.

✅ Money Data Since 2000: Most new money has been private credit, fueling debt pressures.

✅ Government Negative Financial Equity: Why it’s necessary, but why Americans still feel the squeeze from high-cost debt.

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory.

Curious Minds, Engineers, and Finance Professionals will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here:...

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen reveals how high-cost debt is crushing Americans and why current U.S. policies are steering the economy toward crisis. He explains, with clear double-entry accounting and Ravel visualizations, how private bank lending still creates most of the money in circulation, why government deficits actually increase deposits and reserves, and how open-market operations simply shuffle assets without generating real wealth. Keen argues that the true solution isn’t austerity but a Modern Debt Jubilee—a bold reset that cancels unpayable debts, restores balance sheets, and revives real economic growth without relying on the illusion of “printing money.”

In this breakdown, you’ll discover:

✅ Government Spending & Taxes: How deposits rise and taxes fall—what actually impacts Americans’ wallets.

✅ Bank Reserves 101: What banks can—and can’t—do with reserves, and why it doesn’t relieve high-cost debt.

✅ Deficit Mechanics: Why deficits create money and reserves, and why surpluses can worsen economic stress.

✅ Eight Key Entries: How government money creation works behind the scenes beyond basic double-entry.

✅ Borrowing from the Private Sector: The accounting myth that misleads policymakers and the public.

✅ OMOs & QE Explained: When these tools create real money—and when they fail to.

✅ Money Data Since 2000: Most new money has been private credit, fueling debt pressures.

✅ Government Negative Financial Equity: Why it’s necessary, but why Americans still feel the squeeze from high-cost debt.

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory.

Curious Minds, Engineers, and Finance Professionals will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here:...

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen reveals how high-cost debt is crushing Americans and why current U.S. policies are steering the economy toward crisis. He explains, with clear double-entry accounting and Ravel visualizations, how private bank lending still creates most of the money in circulation, why government deficits actually increase deposits and reserves, and how open-market operations simply shuffle assets without generating real wealth. Keen argues that the true solution isn’t austerity but a Modern Debt Jubilee—a bold reset that cancels unpayable debts, restores balance sheets, and revives real economic growth without relying on the illusion of “printing money.”

In this breakdown, you’ll discover:

✅ Government Spending & Taxes: How deposits rise and taxes fall—what actually impacts Americans’ wallets.

✅ Bank Reserves 101: What banks can—and can’t—do with reserves, and why it doesn’t relieve high-cost debt.

✅ Deficit Mechanics: Why deficits create money and reserves, and why surpluses can worsen economic stress.

✅ Eight Key Entries: How government money creation works behind the scenes beyond basic double-entry.

✅ Borrowing from the Private Sector: The accounting myth that misleads policymakers and the public.

✅ OMOs & QE Explained: When these tools create real money—and when they fail to.

✅ Money Data Since 2000: Most new money has been private credit, fueling debt pressures.

✅ Government Negative Financial Equity: Why it’s necessary, but why Americans still feel the squeeze from high-cost debt.

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory.

Curious Minds, Engineers, and Finance Professionals will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here:...

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen exposes the ugly lies behind the Nobel Prize in Economics, revealing how the world’s faith in Ben S. Bernanke’s theories is fundamentally misplaced. He explains, with clear data analysis and accessible financial modeling, how Bernanke’s proposed banking system misrepresents how money is actually created, why his policies overstated the effectiveness of central bank interventions, and how the supposed “solutions” fail to address structural weaknesses in modern finance. According to [Name], those who blindly follow Bernanke are misled into thinking that manipulating reserves and interest rates can generate real economic stability, when in reality it often amplifies inequality and financial risk. The true path, he argues, lies in rethinking the foundations of banking and monetary policy, exposing the flawed assumptions behind the Nobel Prize’s most celebrated laureates, and pushing for reforms that reflect how money and credit genuinely function in the economy.

In this breakdown, you’ll discover:

✅ Bernanke’s Banking Fallacy: How his proposed bank operating system misrepresents money creation and misleads policymakers.

✅ The Nobel Prize Myth: Why the most celebrated laureates often ignore real-world banking mechanics.

✅ Private Bank Lending Truths: How most money in circulation is created by private banks—not central banks.

✅ Government Policy Misconceptions: Why relying on interest rates and reserves doesn’t fix structural economic issues.

✅ Accounting Illusions: How flawed interpretations of double-entry bookkeeping have skewed economic theory for decades.

✅ Credit & Debt Realities: How Bernanke’s framework underestimates high-cost debt pressures on households and businesses.

✅ Market Interventions Exposed: When tools like QE and central bank operations actually fail to generate real wealth.

✅ Economic Consequences: How following the wrong model amplifies inequality, financial instability, and public misconceptions.

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory.

Curious Minds, Engineers, and Finance Professionals will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial...

Learn 50+ Years of Economics in Only 7 Weeks: apply at https://www.stevekeen.com

(Bonus: accepted students who join get Ravel — the double-entry, macro visualization tool used in this video.)

In this revealing video, Steve Keen takes us back to the 1929 Great Depression to show how similar economic conditions could lead us to another crisis. He critiques the conventional wisdom, explains why debt-fueled booms lead to catastrophic busts, and highlights a better way forward. Steve’s deep dive into private debt, inflation, and government spending offers a much-needed alternative perspective to mainstream economic thought.

Key Takeaways:

The True Cause of the Great Depression: How over-indebtedness and deflation triggered the collapse, and why we’re repeating these same mistakes today.

Fisher's Paradox: How the more debtors try to reduce their debt, the more they actually increase it, exacerbating economic downturns.

The Role of Private Debt: A detailed look at how high private debt, combined with low inflation, caused both the boom and bust of the 1920s and 1930s.

Lessons from History: What went wrong in the 1920s, how it led to the Great Depression, and why we still haven't learned from it.

Government Spending & Recovery: Steve shows why government intervention (like the New Deal) was key to stopping the economic collapse and why it’s critical to act similarly today.

What’s the Real Crisis?

Steve goes beyond the numbers to question whether we, as a society, are chasing the wrong crisis. With the UK and global economies facing mounting debt and the possibility of inflation spiraling out of control, it's time to ask: Are we truly prepared to face the same conditions that led to the Great Depression?

The Truth About Debt and Inflation

Steve dives deep into the data to debunk the myths surrounding the "debt crisis." According to Steve, private debt, not government debt, is the real problem, and it’s being ignored in the current economic debate. The rise in private debt since the 1980s, fueled by deregulation and a focus on asset price speculation, has led us to the point where the next financial collapse may be just around the corner.

Key Concepts Covered:

Fisher’s Paradox: The idea that debt reduction efforts can lead to increased debt burdens in times of deflation.

Private Debt vs Government Debt: How credit impacts the economy and why private debt is more dangerous than government debt.

Government’s Role in Recovery: Why government spending—especially deficit spending—is necessary to prevent a crisis.

Policy Solutions

Steve suggests three policy measures that could help avoid another Great Depression:

Limit Private Debt: Regulate lending to prevent asset price bubbles.

Government Spending: Use government debt to finance essential services and stop economic decline.

Debt Jubilees: Cancel or restructure private debt to prevent another financial collapse.

The Ravel Software Demonstration

Steve uses his proprietary Ravel software to demonstrate how the current financial system is designed to fail and what needs to be done to fix it. Using double-entry bookkeeping, he shows the difference between conventional economic models and the reality of how money and debt work in today's economy.

Critical Insights:

The Real Impact of Government Debt: The video challenges the conventional wisdom that government debt is the primary issue, arguing instead that private debt is the true threat.

The Danger of Deflation:...

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Get exclusive Cyber Monday bonuses including Unlimited Ravel use (my proprietary software I use in this video), Q&A calls with me, 100-Day Guarantee and other exclusives at https://cyber.stevekeen.com

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Banks don’t “lend out” your deposits, they create money when they lend.

In this video, Steve Keen dissects the classcial economist's fractional-reserve story, responds to critics, and uses Ravel to show why the classic money-multiplier only “works” if loans are made in cash. Once you enforce real double-entry bookkeeping, the narrative collapses — and the real mechanics of bank-originated money and debt come into focus.

What you’ll learn

• Why the textbook money-multiplier breaks under proper accounting

• How bank lending creates deposits (new money) on both sides of the ledger

• Why reserves ≠ “loanable funds” and why deposits aren’t lent out

• Where popular explanations violate assets = liabilities + equity

• Why getting money creation right matters for debates on deficits, QE/QT, and “can we afford it?”

• How Ravel exposes hidden assumptions in neat verbal stories — step by step

Key takeaways

• If a model can’t balance the T-accounts, it’s wrong, regardless of how often it’s taught.

• Loans create deposits; deposits aren’t a stockpile that gets parcelled out.

• Cash is the only way to make the textbook multiplier arithmetic “work”, which tells you the model is not how modern banking operates.

• Misunderstanding bank money leads to bad policy: deficit panic, confused takes on QE/QT, and misguided bank rules.

About Steve Keen

Steve Keen is an economist known for accounting-consistent, data-driven models of money, debt, and instability. Creator of the Minsky and Ravel tools, he replaces classroom myths with operational mechanics you can simulate and test.

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• Ravel included for accepted students who join

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