Everyone seems to have their own idea of the rest of this title, but if it doesn’t have anything to do with monetary policy, they are pretty close to being completely wrong. There is no public or fiscal policy that can make deflationary gyrations and lack of adequate liquidity in the markets work. It isn’t the debt. It isn’t the regulatory burden. It isn’t even the structure of taxes, spending, social programs, or any of that. I don’t intend to downplay the possibility that imbalances in any of these things have economic effects, but they matters of efficiency and do not cause the mass economic damage to markets and the business environment that failure to maintain adequate liquidity does.

Broken monetary policy is the elephant in the room. It magnifies all of the problems on an exponential basis, by making money scarce, and we all feel around it in darkness, addressing the confusion of the individual things that are being broken as it smashes its way around. By addressing this one problem on the first order, and getting the pachyderm out of the room, all of the other problems will become much smaller and much easier to cope with by the political system in order to make the economy more efficient. But if we don’t deal with the real problem none of the other ones will ever go away, no matter how much is cut out of the budget or how much deregulation goes on because it isn’t a problem of efficiency. It’s a problem of there just not being enough income or potential income from lack of liquidity to even employ everyone who wants to work.