Barrapunto

"what would happen if you simultaneously doubled all prices and all incomes? Nothing!" In other words, if consumers are rational (now there's a much abused word, but I digress), they shouldn't care about the absolute prices of goods, just their relative prices. So doubling all prices and doubling a consumer's income shouldn't cause her to do anything different (but of course, changing relative prices would alter behaviour).

Bollocks. Double all prices and my income, and I'd be much better off because my mortgage payments would take less of my income (even if interest rates were also doubled). That's because I'm in debt-I have a mortgage. And you can't simply double interest rates to reach the same outcome as doubling prices, because debt repayment dynamics make the whole thing "nonlinear": include debt seriously in your analysis of consumption, and the "veil over barter" vision of money collapses.