Karl presents the numbers, analyzes them and concludes: This can't go on forever folks!
This is his blog topic today: "Personal Income and Spending" http://market-ticker.org/akcs-www?post=213293
He rides Paul Revere sounding the alarm this over and over again proving mathematically that the number 1 today plus the number 1 tomorrow will equal two the day after tomorrow and there will not be another number 1 added after that because the system of addition no longer works. It collapses unless the enemy is confronted and stopped at a bridge in Concord.
The numbers he presents are not as simple as 1 and 1. They are the product of economic measures that are all related in some mathematical manner to produce not only where the total economy is at but where, in time, it is going.
Where it is at is scary today (as we approach Halloween) but will become a Zombie Economy tomorrow. No life, dead but still somehow moving with some unexplained purpose to destroy the living. In economic terms that means destroying making a living.
I find it hard to dispute Karl's analysis and his conclusions.
On the other hand I also find it hard to dispute MMT.
Undecided: It is like being undecided about who to vote for at this point where Nov. 4 is approaching soon. Nov. 4 will get here. A decision will be made. The day will come.
We will have economic collapse if nothing is done as a result of either Karl's projection of where we are going or the MMT projections of where we are going if we remain on present course which is headed for the rocks.
How the numbers are related in their mathematical expression is the devil in the details. The nature of the relationship determines the nature of the summation to a total. As the numbers change, or are changed in theoretical experimentation cause and effect relationships determine outcome.
Numbers are numbers. Numbers applied to quantify the workings of our physical world to present mathematical models of reality Produce an airplane, the Boeing Dreamliner that was totally designed and then passed its test flight on a computer simulation. All that was left to do was simply build it. We explode atom bombs in the same way. On a computer with no sound and fury in reality. Laws of nature are immutable in theory (if the things we discover as theory are true in fact)
Economics is a social science that mixes black magic with laws of nature and clouds the relationship of cause and effect, subject and object as well as the action that connects and the two.
Black Magic and Law of Nature are two objects. Both are conceptual. Law of Nature is our best conceptual model expressed in words and/or numbers. If you are to be the first person to fly in a Boeing Dreamliner you certainly hope that we got the model right in every detail.
If you are a believer in black magic then you will fly on a magic carpet because whatever you choose to believe in creates the conceptual reality with no relationship to the Law of Nature.
In nature what is true is true. What is......well.....is what it is.
In black magic what is true is whatever we choose to be true. Why, my dear, it means whatever you choose it to mean. The result of gunpowder thrown onto a fire by a witch doctor may be chosen to mean anything we are told it can mean. The result of striking a primer in a bullet to ignite gunpowder and send a bullet out of a barrel on a flight path that can be mathematically described with a predictable conditional outcome. Both examples started with the law of nature resulting in rapid combustion.
Where, oh where, is that rock upon which to build the church of economics. That rock that in the nature of what it is determines what it does.
The rock of economics is not the account in which money resides as a number.
The rock of economics is conceptual gold. Conceptual gold that exists forever, does not rust, is always the unchangeable base and quantified by a unit of measure that is a conceptual thing that we all agree will never change.
The rock of economics is a digital, serialized unit of conceptual value called the dollar. A rock to which we can associate all the conceptual relationships that serve us for the common good of our endeavors.
Accounts unconstrained by a more elemental component with attributes of money beyond those of a pure number can mean anything we choose them to mean. They enable the practitioners of black magic to practice their trade for their own benefit as long as the true nature of the conceptual thing called money remains a hidden mystery.
Is Karl right? Is MMT right?
Money is a hidden mystery and until it is revealed by removing the curtain of what it is the curtain that banksters have created to serve themselves first, then we can't solve the problem.
The curtain shrouding money is the Account in the Accounting System.
Penetration of that curtain requires mapping an object called money in an Account to its entity properties as SuperClass Object called Money in an Object Oriented System design. While Money has a relationship to the Account in the Accounting System, the Accounting System is not Money.
The Accounting System is the current system that creates money. Banks own the Accounting System that imposes its balance sheet rules upon the total system and consequently their view of the entire Monetary system, what it is and how it functions.
Money is the dominant object in a monetary system. It is the foundation of the operating system. The account in which money resides is in the domain of an application program entity in the operating system, not the operating system itself.
When the system is structured in that manner perhaps agreement will be found in the math of Karl Denninger and MMT.
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