Debunking Economics - the podcast

In this episode, Phil and Steve take listeners on a guided tour through the mechanics of government bond markets — stripping away the myths, misunderstandings and textbook clichés that usually cloud the topic. Starting from a listener question, they explore why governments issue bonds in the first place, how deficits translate into reserves within the banking system, and why double‑entry bookkeeping is the only reliable way to understand what’s really happening behind the scenes.Steve explains that when governments spend more than they tax, they create deposits in private bank accounts and matching reserves for the banking sector. Bond issuance doesn’t “fund” this spending — it simply prevents the Treasury’s account at the central bank from going into overdraft, because most governments have imposed legal restrictions on doing so. Phil pushes on the role of banks, reserves and the idea of “bond vigilantes”, while Steve clarifies the difference between the primary and secondary bond markets, and why private banks are never constrained by reserves when issuing loans.The conversation also tackles common misconceptions: that banks lend out deposits, that reserves are part of the money supply, or that bond sales create new money. Instead, Steve shows how reserves move around the system, why they can only be used for interbank settlement or buying bonds, and how government deficits are the true source of reserve creation. The result is a clear, engaging walkthrough of a system that’s often presented as mysterious — but becomes surprisingly logical once the accounting is laid bare. Hosted on Acast. See acast.com/privacy for more information.

In this episode of Debunking Economics, Phil Dobbie and Professor Steve Keen tackle the global obsession with interest rates. From Australia’s Reserve Bank to the UK’s faltering economy, they explore how central banks use rate changes as a blunt tool to manage inflation and growth. Phil highlights the real‑world pressures on households—mortgages, rents, and tax thresholds—while Steve dismantles the neoclassical models that underpin mainstream policy, exposing their unrealistic assumptions about consumption, altruism, and infinite planning horizons.Together they reveal how rate hikes often enrich bondholders while squeezing ordinary borrowers, skewing income distribution and destabilising financial systems. The conversation ranges from Keynesian misinterpretations to modern monetary theory, questioning whether interest rates can ever be the fine‑tuned instrument economists claim. It’s a lively, critical look at the myths of monetary policy and the urgent need for alternatives that address capacity, inequality, and democratic accountability. Hosted on Acast. See acast.com/privacy for more information.

In this week’s Debunking Economics podcast, Phil Dobbie and Prof. Steve Keen dive into the global water crisis under the banner “Trouble on the Waterfront.” They explore the paradox of Earth’s abundant water supply versus the tiny fraction that is actually accessible, highlighting UN figures that show billions still lack safe drinking water and sanitation. From the UK’s tight margins between renewable supply and consumption, to Australia’s surplus constrained by geography, and Iran’s alarming shortages that threaten the viability of Tehran itself, the discussion underscores how climate change and poor management amplify the risks. Along the way, they touch on desalination’s energy intensity, the embedded water footprint in consumer goods, and the stark reality that water scarcity is as much about distribution and governance as it is about absolute supply.The conversation then pivots to the UK, where privatisation of the water industry has left infrastructure lagging. Keen points out that while the public sector once invested in long‑term projects like Kielder Reservoir, the private sector has built virtually no new dams since the 1990s, preferring short‑term profit over resilience. Together, they argue that essential resources like water and power require excess capacity and long‑term planning—something markets alone cannot deliver. With wit and urgency, the episode makes clear that water is the ultimate recyclable resource, but without effective stewardship, even countries famed for rainfall could face scarcity. Hosted on Acast. See acast.com/privacy for more information.

Foreign aid is shrinking fast. The UK has cut its commitment from 0.7% of national income to 0.3%, the US has scrapped USAID and axed 80% of its projects, and overall global aid is down by more than a quarter in just five years. That’s less than 0.2% of the world economy — smaller than Walmart’s turnover — even as the Gates Foundation warns that cuts have already reversed decades of progress in child survival. In 2025 alone, 200,000 extra children under five are expected to die from preventable causes. And in places like Afghanistan, Somalia, and the Central African Republic, one in ten infants won’t make it to their first birthday.Economist Steve Keen argues that aid is often designed with the assumption that chunks of it will flow back to donor countries through trade and contracts, reinforcing global imbalances rather than fixing them. He suggests revisiting Keynes’s old idea of a Bancor — a global currency to balance trade — so aid isn’t just a disguised subsidy for rich economies. Without structural reform, we’re left with the paradox of trying to support countries where GDP per capita is $150–$200, while the same amount is a single day’s salary in Luxembourg. Rethinking aid means asking whether we’re propping up conflicts and fragile states, or building a fairer system where resources actually stick and help people survive. Hosted on Acast. See acast.com/privacy for more information.

So, what does it mean to be Austrian? And we are not talking about wearing Lederhosen every weekend, going on long hikes through the mountains and eating schnitzel. Instead, the focus in this podcast is on the Austrian school of economics. They are two very different things, The country has moved on, but the theory remains. This week Phil and Steve look at the principles of Austrian economics – what they got right (partially) and what they got wrong. They contrast it with neoclassical economics, exploring the significance of equilibrium and innovation in capitalism. The discussion also touches on the concept of praxeology, the limitations of introspection in understanding economic systems, and Schumpeter's contributions to the evolution of economic thought. Hosted on Acast. See acast.com/privacy for more information.