“Give Every American $100,000” – Economist’s Radical Plan to WIPE OUT Household Debt

**Patrick Bet-David** (0:00)
So good, so good, so good.

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**Patrick Bet-David** (0:26)
What do you think about Alan Greenspan? He just passed away at the age of 100 What do you think about Alan Greenspan's legacy?

**Steve Keen** (0:34)
Very negative.
The one thing we should remember Greenspan for is he rescues the finances, so when it causes crashes, that's the Greenspan put. When the stock market fell 27% in one day, he basically guaranteed that all the financial firms would be rescued. And that basically led to encouraging financial instability and financial irresponsibility. I think he did a very negative contribution to the American economy.

**Patrick Bet-David** (1:04)
Which American economist do you think or a Fed chair do you respect that did a decent job in America? Who would you say that person was decent?

**Steve Keen** (1:16)
All the Fed chairs have come from the same school of thought, which is called neoclassical economics, that includes Ben Bernanke, for example.
They have, in my opinion, totally, they have a model of the economy, which is to use a great American satirist, Menchikan. Their theories are neat, plausible, and wrong. And those are the only people that get considered for a position that the Fed are conventional economists. They don't even understand how money is created. So you've got, not a single one I would take particularly seriously. If you wanted to ask me a mainstream economist I have some time for, I'd mention Robert Schiller and Paul Romer. That's really about it.

**Patrick Bet-David** (1:53)
Got it.
How hard of a job do you think the most recent chair has warged that he got the job with being pressured to lower rates versus keeping them that way? And if you were given that job, let's just say if you were given that job, this is your world, you follow it, what do you think would be the right move for him to make in this state of affairs that we're in America?

**Steve Keen** (2:15)
Well, I think the main problem in America is too much private debt.
It's not the government debt that matters, and that's what all the mainstream economists obsess about. What causes financial crises is too much private debt, booms and busts in the level of rate of growth of private debt. So I'd be using the government's capacity to create money to cancel household debt, which is what we used to call a jubilee. That's what I'd be doing. And in terms of the interest rate, again, it's a very fallacious theory of economics. As the rate of interest controls the rate of investment. That's the basis of, or the rate of consumption, in fact, is what so-called modern economic theories argued the rate of interest controls. They're completely fallacious. They don't work. And at the moment, if I was in charge of America's interest rates policies, I'd be reducing them because we're about to see a huge shock for the American economy coming out of the closure of the Strait of Hormuz.
The impact of that on the productive capacity of the economy to produce goods and services, which will mean people can't service their debts anymore. And you're going to start seeing bankruptcies coming out of the inability to pay the debt levels people currently have because of the destruction of the productive capability of the economy from the war against Iran.

**Patrick Bet-David** (3:29)
So your position will be to lower rates. So you would agree with Trump because Trump wants to see also the rates being lowered?

**Steve Keen** (3:35)
In this particular point, yes, I do.

**Patrick Bet-David** (3:36)
Okay, can you unpack that? Why do you... because some people push back on the president on lowering rates and they're concerned if you lower rates, you know, inflation may continue versus keeping it kind of where it is right now for things to level off. What is your position and the reasoning for lowering rates?

**Steve Keen** (3:57)
Well, inflation is not controlled by interest rates in any effective sense. If you want to reduce the rate of inflation by using interest rates, you have to do something like Vokla did and cause a recession. Put rates up that much. That's what actually... That's the only control mechanism is when you cripple the economy and therefore push inflation out that way. That's what happened under Vokla.