Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com (Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.) Top Economist Steve Keen explains how government money is actually created — and why most of the money in circulation still comes from private bank lending, not the printing press. With clear double-entry accounting and Ravel demos, Steve shows how deficits create deposits and reserves, why “reserves aren’t money,” and how open-market operations change the mix of assets without magic money trees or looming doomsday math. In this breakdown, you’ll discover: ✅ Cash vs digital money: why the press in DC is a sideshow ✅ Government spending and taxes in the ledger: deposits up, taxes down — what really changes ✅ Reserves 101: what banks can and can’t do with them (and why they aren’t “spendable” money) ✅ Deficit mechanics: why deficits create both money and reserves, surpluses destroy them ✅ The eight entries you need to model government money creation (beyond simple double entry) ✅ Why “borrowed from the private sector” is an accounting myth in loanable-funds models ✅ How OMOs and QE actually work: when they create money, when they don’t ✅ The data picture: since 2000, most new money has been credit-backed (private), not fiscal ✅ Why government negative financial equity is normal — and necessary for private net financial assets Key insights: • Deficit is not a bug — it’s the feature that creates net financial assets for the private sector. • Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte. • Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system. • Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place. • Accounting done properly shows government negative financial equity mirrors private positive equity. ----- What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below. Subscribe for reality-based economics Like if this clarified how deficits, reserves, and QE actually work Share to help others move beyond textbook myths ----- Who is Dr. Steve Keen? Dr. Steve Keen is an economist known for accounting-consistent, data-driven models that explain how bank money, private debt, and policy operations shape the real economy. Creator of the Minsky and Ravel tools, he replaces classroom analogies with operational mechanics — essential for engineers, finance professionals, and anyone who wants clarity over ideology. Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com (Plus get Ravel — the software used in this video — as a bonus if you’re accepted and join.) #usshutdown #finance #BankingSystem #QE #economics #money #Macroeconomics #government
