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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.

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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.)

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