July 9, 2015

The economics of here and now

Comment on ‘An inconvenient historical truth’


I agree, graccibros, let us return to the economics of here and now. With regard to the correct macroeconomic formula that describes the actual Greek situation, see my post: Poisoned, hanged, and shot. Comment on ‘Austerity policies — prescribing rat poison for ailing economies.’*

The Greek situation, however, is only exemplary for a really profound question, that is, the relationship between growth of debt, profit, and employment. Put simply: can the market system (global, not Greece, not Germany, not US, not China, etc) survive without steadily growing public/private debt?

The answer is that a local debt reduction leads to local recession (2013), this is the case of Greece, and a global debt repayment brings the whole system down (2014).

This is, with regard to the future, the really inconvenient historical truth.

Egmont Kakarot-Handtke

Kakarot-Handtke, E. (2013). Redemption and Depression. SSRN Working Paper Series, 2343561: 1–28. URL
Kakarot-Handtke, E. (2014). Mathematical Proof of the Breakdown of Capitalism.SSRN Working Paper Series, 2375578: 1–21. URL

*See on the RWER blog or here