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Economics must change method of research. Deduction instead of mathematical models and induction. The theory of Money and savings revisited. Central Banks and the FED must review the creation of debt instead of issue of money, because debt is huge and a menace to the nation.
Economics must change method of research. Deduction instead of mathematical models and induction. The theory of Money and savings revisited. Central Banks and the FED must review the creation of debt instead of issue of money, because debt is huge and a menace to the nation.
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Economics must change method of research. Deduction instead of mathematical models and induction. The theory of Money and savings revisited. Central Banks and the FED must review the creation of debt instead of issue of money, because debt is huge and a menace to the nation.
Droits d'auteur :
Attribution Non-Commercial (BY-NC)
Formats disponibles
Téléchargez comme TXT, PDF, TXT ou lisez en ligne sur Scribd
By Santiago Sevilla Economist ( Zurich University)
Great experience it was to be able to study Logics and Economics, at the same time, at Zurich University. One could enter freely to the lessons of Philosophy or Economics. Universal knowledge was promoted. Famous professors of both sciences held their brilliant discourses. Rudolf Mayer in Philosophy, Friedrich Lutz in Economics. Systematic doubt, instead of dogmatism was the tacit rule. The result: Economics appears to be faulty decades later. The root of this unpleasant notion lies in Logics. The problem is that it is ilogical to act in reality, blindly following fiction. Fiction is feigned or invented theory, a work of imagination, a myth. As it is ilogical to model life and death in accordance to religious myth, it counters reason to apply economic models which only follow the whims of the wit. A great number of economic principles are produced under unreal assumtions, such as "Expectations", "ceteris paribus", the "Static Economy", the "Close Economy", the "Dynamic Economy", which all, in the end, lead to conclusions not applicable to the real world, but, nevertheless, are accepted as a valuable paradigm. The cult of John Maynard Keynes has led to accept the equality between Savings and Investment in a static economy, and its contradiction in a dynamic one. Neither one, nor the other are at all true. Savings is equal to money. Investment is a different amount all together, and can only be measured statisticaly. The famous expression S=I is false. It is not even a mere tautology. The concept of "equilibrium" is again an invention of fancy, a sort of unachievable state of economic Nirvana. All economic models in their mathematical drapery, are pretentious fakes of reality, with damaging consequence to factual policies. Induction through models is the wrong path for economic theory. Only statistical correlations and factual regularities could create useful deductions with general validity. Economics must center its attention into the nature of money, and its true multiplier, which is the rate of interest. The burden of debt is enormous and injustifiable. If the state can create money, notwithstanding its bicephalic nature with two heads, Executive Government and Central Bank or FED, it is inconceivable and absurd to create debt. The two heads have led the monstruous Cerberus to a self defeating confusion. This nonsence is worlwide, due to the revered independence of Central Banks. Public debt in the world is now huge, and menacing to general stability and progress. But so is taxation, devouring more than 40% of Income. Here again the state could replace taxation with moderate money creation. People trust the government with the posibility of waging war, but people doubts about giving to it the faculty of issuing money according to a well controlled budget. This again is contrary to logics. Human life is bedeviled by inconsistency with itself, incongruity and contrariety of things, words, thoughts and propositions, but it is our duty to turn round to redress errors, and make amends. I wonder if society is going to persist in these obvious mistakes, after seeing the light.