Site Index

“Get your facts first, then you can distort them as you please.”
Mark Twain

Essays on this site


 “Fundamental Monetary Constraint” This is the most important essay on this website that reveals the central problem for modern economies that is not recognized by contemporary macroeconomics.  It explains the missing “Fundamental Monetary Constraint” along with many reasons for how it has influenced our US economy–for good and for bad.  I recommend this as the place to start on this web site. suggest reading this first

Monetary Velocity : GDP equals monetary quantity times monetary velocity. It has little significance on an economy when all agents are very similar (homogeneous agents)– This analysis shows exactly how it is determined in an economy and its potential bad effect on GDP when there are wide variations in how much cash people hold (heterogenous agents.)  Although most economists would disagree, section 3 of this essay explains an hypothesis showing how monetary velocity differences together with the 1929 stock market crash  was likely a significant trigger that started and even prolonged the 1930’s depression.  6 pages

Social SecurityHow social security works–and why it works so well: Social security money is not actually “saved” anywhere. It also demonstrates why this is the very most sensible way—in fact the only way—any retirement plan should work effectively in an economy,  whose main purpose is to divert some economic resources from present day workers directly to present day retirees. 5 pages


Miscellaneous Site Items


Interview with Princeton economist Atif Mian and Heather Boushey with my commentary Mr. Mian’s views are very close to mine. I took this unedited interview except have added my own comments in green text that were NOT in the original interview.  View interview WITH my comments here.

View interview in its ORIGINAL FORM WITHOUT my comments.

Topic #2



agent-. A word economists often use to refer  to “people”  or other entities who trade in an economy.

aggregate demand—The total money value that all people together spend for all final goods/services over a specified period, like a year in an economy

closed economy—An economy in where all trade is conducted only between agents in the same economy. There is no to trade with any other economy.

distributional financial accounts—Data category that the Fed collects and displays online that shows quarterly total US financial data for four wealth categories of agents:  0-50%, 51-90%, 91-99% top 1%

earned income tax credit—An income tax credit given for people with low incomes.

FED– The US institution that increases or decreases money supply, and determines interest rates

fiscal policy—Government policy that sells Treasury bonds to get money that is used for public funding

GDP-Gross domestic product—which means the total value  of all final goods/services produced in an economy for one period of time, often for one year.

J. M. Keynes–British-Economist who developed theory and methods for reviving economies in recession or depression.

loanable funds market–  The market where money can be  borrowed or loaned usually at interest.

macroeconomics—The branch of economics that studies the entire economy as a whole—originally invented to understand the cause of economic recessions/depressions

Mercantilism:  The belief, especially in the 17th and 18th century, that included recommending that countries enrich themselves by accumulating money or gold by a policy of exporting goods/services  to other countries at more value than they import.

Milton Friedman  An economist that advocates “free markets” meaning very little or no government regulation.

MMT—Modern Monetary Theory–  A controversial  view of economists who believe that higher deficit spending is a valid alternative way to get money for government spending rather than using only taxes.

monetary velocity: A number than describes how rapidly an “average dollar is spent.  It is usually expressed as the inverse of time expressed as (a fraction of) years that on average elapses before a dollar is respent.  If the rate at which  some particular dollar bill is spent is once every six months,  velocity for that dollar is 12/6, or 2.

monotonic—Describes a series of numbers that  always either increase with time, or always decrease with time. Such series will be usually expressed as “monotonically increasing” or “monotonically decreasing”

nominal value: A way to express the value in the actual monetary amount, ignoring the effect of inflation or deflation.

public debt—The total outstanding amount the value of public government debt.

Paul Samuelson—Economist who wrote the first economic textbook that explained macroeconomics—beginning in about 1948.

productivity—A measure of the amount of time required to produce some value of goods or services. The less time, the higher value of productivity.  Often an amount produced per hour for one worker.


secular stagnation—Describes an economy that stubbornly stagnates with no growth for awhile.

trade imbalance—When a country trades with other countries, the value that country exports minus the value  they import.

transfer payments—Government payments that tax one set of citizens to give to others who need such money

trickle down—Describes discredited idea of giving tax breaks to those of high wealth in the hope that they will (somehow) increase GDP for everyone in the economy.