unless you measure the entire economy.

Interest rates can mess up the Phillips Curve. If rates are too high for companies to make investments, then they don't hire, or worse, lay off. Stagflation occurred because interest rates were too high to make many investments. Phillips curve doesn't take into account the fact that most companies need to borrow money to grow.

With our crazy economy, and drives for market share, and the Chasm (read some Geoffry Moore), large investments (read, debt) are required to establish one's self as the dominant player in an industry. Funding growth out of earnings means that it will take a company 30-40 years to grow to be a dominant player in an industry. Companies have become addicted to the fast growth provided by the debt. Geof Moore says that you need to capture mind/market share and become THE established player, the standard, so to speak. The reality, you don't have 40 years, maybe 2-3 years if you're lucky.

Phillips curve also assumes a stable-sized labor market, and assumes away the problem of unqualified workers who will take a job at a lower wage by lying. It doesn't account for a huge worldwide labor market, where companies now use computers to scour the ends of the earth looking for people who claim they can do the job for a lot less money. Phillips assumes stable (read American) labor/benefit laws. Phillips doesn't account for slave labor in North Korea, Sudan and other parts of the world.

Don't get me started on Keynes. Keynes' theories were perfectly valid, however, Keynesian theory would tend to indicate that the government would run surpluses "at some point" sufficient to pay off the debt. Our government just borrows and never repays. Most Democrats and Republicans are Keynesian because they want us to continue to run deficits and "stimulate" the economy.

But, like an addict on amphetamines, there will be a judgement day.

The government creates debt out of thin air, by selling treasuries. But here's the real question. What would happen if noone showed up for the auction? What would happen if the debt rating of the U.S. Govt was bad enough that noone wanted to buy treasuries?

I don't know much about the Laffer curve, but I do remember a concept called "trickle down economics". The idea was that if you give tax breaks to the rich, the benefits would "trickle down" to the lower levels of the economy. It was BS then, it is BS now.

As for the Laffer curve, Reagan believed that the U.S. with the higher tax rates was close to the point of inflection in the curve. He thought that lowering taxes would put us on the other side of the curve and net more revenue. The problems with Laffer are that it doesn't account for ALL TAXES in the economy. If you add up your income, sales tax, property tax, phone taxes, hotel tax, car tax, etc. you would discover that most people are taxed at 30% or higher.

My personal perspective is that we would be better served to enforce immigration laws, and ensure that all participants in the economy pay taxes. Many companies get away with tax murder in this country by using illegal workers, paid by the job, with no taxes withheld or paid. Imagine if they were required to pay for every worker the taxes equal to at least minimum wage. We could put billions back into the tax coffers. This is one big reason I'm against income tax, but in favor of a national sales tax. Everyone (even illegals) pay it if they buy stuff.

I don't remember the four types of unemployment. It's been too long. One is structural. I know that the unemployment rate doesn't meaure all four, in fact, it probably only measures one.

I don't remember Quantity Theory. I think it might have to do with how fast money "turns over" in an economy. Hint: The poor turn over money much more quickly than the rich.

I had 12 hours of Economics in College, but that was 17 years ago. All I can say at this point is that as much as I hated Bill Clinton, at least he got the budget balanced for a year or two. We need not only balanced budgets, but surpluses for about 5 years until baby boomers retire, then we'll need to run deficits to pay their SS and Medicare benefits. At some point, we have to pay all that off.

It makes me want to invest in gold and silver again, just like my dad did in the 1970's. I may just do that. Money out of the market and into non-perishable commodities.