Debunking Economics - the podcast

This week Phil and Steve dismantle the structural shift of the global economy toward a permanent state of debt dependence. Following a critique of Steve’s recent debate on the Piers Morgan show and a revisit to last week’s discussion on th link between energy and productivity, they look at how policy since the 1980s aggressively incentivizes borrowing over saving. Steve argues that the banking sector now functions primarily to inflate asset bubbles—particularly in housing—rather than funding productive industry, effectively conditioning entire generations to rely on debt-fueled asset growth for wealth. By debunking the neoclassical "savings myth," they show how the broader economy is dangerously fragile to any slowdown in the relentless creation of new debt. Hosted on Acast. See acast.com/privacy for more information.

Steve Keen, economist famous for critiquing neoclassical theory and studying debt, energy, and instability, argues that productivity myths ignore physics. He links measured productivity to energy throughput, says technology lives in machines, and warns that limits to energy-efficiency plus a shift to resilience will reshape growth and industrial strategy.

A sharp debate about 2026's double-digit inflation driven by an energy shock from the Strait of Hormuz. They argue higher interest rates can worsen household debt and deepen a supply crisis. Alternatives discussed include fuel subsidies, wage/price measures, rationing and a rapid push to renewables and energy sovereignty. The conversation contrasts policy buffers and critics of standard economic models.

Steve Keen, economist famous for critiquing neoclassical theory and studying debt-driven instability, challenges claims for greater central bank independence. He disputes mainstream money models and stresses bank-created money, private debt dynamics, non-bank lending risks, and the need to refocus central banks on realistic financial-stability policing rather than micromanaging GDP.

A wide-ranging look at AI's enormous energy appetite and how power shortages could hobble high-tech dreams. Geopolitical flashpoints like the Strait of Hormuz and Gulf investments are linked to risks for chipmaking and data centers. Supply bottlenecks from helium to semiconductors get unpacked. The discussion connects energy scarcity to inequality, food security, and who will control robotic and AI infrastructure.

Phil and Steve discuss the escalating global energy crisis and Australia’s precarious response. They critique the government’s move to lower fuel prices by cutting excise taxes and GST, arguing that while it offers short-term relief to the working class, it fails to address the critical issue of supply and consumption. The conversation highlights a significant vulnerability: Australia maintains only a 30-day onshore reserve of petroleum, far below the International Energy Association's 90-day requirement. Steve warns that a total depletion of diesel reserves could lead to a domestic famine, as the nation's food distribution rely almost entirely on trucking. To mitigate future shocks, they explore the necessity of strategic rationing, the potential for a "carbon coupon" parallel currency, and the urgent need for a massive, publicly funded shift toward electrification. Hosted on Acast. See acast.com/privacy for more information.

They unpack two rival definitions of value: cost-of-production versus subjective utility. They trace how innovation creates short-term markups that competition later erodes. They explore firms’ pricing practices like cost-plus and how segmentation and scarcity let brands keep high margins. They challenge equilibrium models and connect classical theories to modern market dynamics.

A lively discussion of how compound interest ties to exponential growth and physical resource limits. They trace historical bans on usury and why attitudes shifted after fossil-fuel driven growth. Banking mechanics and money creation are explained alongside why financial returns can outpace real economy returns. The conversation warns how climate and energy decline could end perpetual growth.

Phil points out that the US is likely to spend $1.5 trilion on defense/offense spending this year. Acknowledging that sovereign currencies can essentially create money to fund defense, doesn’t there get a point where too much is just too much? A significant portion of this expenditure flows to major defense contractors like Lockheed Martin and Northrop Grumman, often resulting in "corporate welfare" where increased military budgets are prioritized over social welfare. Steve says that while money creation is theoretically limitless for the US, the real-world constraint lies in physical production capabilities and the availability of essential materials like rare earth elements, which are largely refined in China. This strategic dependence on foreign resources, combined with the inflationary pressures that can arise from massive government spending, suggests that a nation's ability to sustain a war is ultimately determined more by its domestic manufacturing capacity and resource security than by its purely financial reserves. Hosted on Acast. See acast.com/privacy for more information.

A brisk debate on windfall taxes: how the UK levies on North Sea oil work and why they feel temporary. A comparison of national ownership versus privatized extraction and who should capture resource gains. A provocative look at whether tech and banking profits from network effects and central bank policy count as windfalls. Practical design challenges and avoidance risks round out the discussion.