For several years I have kept a record of some of the flawed and fallacious statements that people, particularly people in the know, make about economic topics. Instead of just keeping them for my own entertainment, I have decided to publish these statements on the Internet, along with my account of the truth.
Since I have collected so many, I will start with flaws and fallacies related to money and banking for two reasons. First, pundits have, for the most part, ignored the importance of money in the recent economic depression (2008). Second, this provides a good set of discussion topics to accompany my presentation “Money Matters”.
I do not intend to make exhaustive comments here. Important topics I will expand in another sections.
The idea that money equals debt become one of the more popular myths. This myth seems to have grown out of a misunderstanding of bank accounting. I will explain the logical inconsistency in the idea of money equaling debt.
A fairly large number of economists, some of them quite well respected, believe that the quantity of money must continue to grow perpetually. They give several basic reasons for this belief, but none of those reasons make much sense.