Apologies for post silence, but there's a good reason: a forthcoming new book

I haven’t put up a blog post for some time (though the podcasts are as regular as clockwork, thanks to Phil Dobbie), and there’s a good reason: a post on the economic policies of the new UK Labour Government has turned into a book.

I hope to finish it this week, when I’ll then post it here (in PDF format since obviously its size will breach Patreon and Substack limits on post length). As usual, I’ll make it freely available (not behind a paywall), because I want the ideas in it to be shared as widely as possible. Please do share with your contacts when you receive it.

It explains why Reeves’ obsession—and Musk’s in the USA—with running a balanced budget looks sensible to her. IF the Neoclassical model of banking, called Loanable Funds, is correct, THEN the future crisis that she and Musk fear is inevitable. Government debt and interest rates skyrocket, and GDP collapses.

But the model is wrong. Households don’t lend to firms, nor do they buy bonds off the Treasury (at the initial auction of bonds): banks do. And the government’s main bank accounts are at the Central Bank, not private banks. By simply removing those two false assumptions, a totally different outcome applies. A government deficit results in a growing money supply, and no crisis.

In this real-world setting, the balanced budget that both Reeves and Musk thinks is essential actually results in a lower rate of economic growth, when they both think it will enable faster growth.

This new book explains the modelling in great detail, because I want as many people as possible to be able to do this themselves.

This necessitates learning how to drive Ravel, because it is the literally the only computer program that enables the construction of double-entry bookkeeping models of the financial system. This can be done without having to master Ravel’s mathematical modelling capabilities—though I explain those as well in the book.

I am beyond frustrated with how the pedestrian belief that “the government is like a household and must spend less than it earns” dominates public discourse, but I can understand why too when so many people believe that banks “lend out deposits”—since that’s what conventional economics teaches. This new book grew out of this frustration, because no amount of posting on this topic by me (or like-minded colleagues, such as Richard Murphy and Stephanie Kelton) will convince enough people to turn the tide.

Instead, I think that people like yourselves—people who subscribe to and support economic rebels like us—need to be able to explain this analysis to your friends and colleagues.

This book will show you how to build accounting-only models of the financial system in Ravel, and how to run some models I’ll provide with the book that also do the numerical simulations done above.

I have roughly 10,000 supporters and followers on Patreon and Substack. If 2-3 per cent of you are willing to help, then that’s 200-300 people who can bore their friends over a beer or meal every now and then, and in the process convince them that this “fear of deficits” is simply wrong. Otherwise, we’ll be stuck with economic policies that aim for growth but achieve the opposite (and which will also give us no guidance of what to do when global warming forces degrowth upon us).

Ravel is available via Patreon at https://www.patreon.com/ravelation; it is $1/month for the modelling only version, and $7/month for the extended data analysis version. The new book provides a detailed explanation of how to use Ravel to unravel the persuasive but nonsensical economic thinking that has locked us into unending austerity.

The two pivotal models in the book are attached to this post on Patreon: https://www.patreon.com/posts/apologies-for-116740936. Unfortunately Substack only supports embedding PDF and similar mainstream file formats (not including compressed files).