OK, lot of moving parts here. 1. Full employment target was set in the Full Employment & Balanced Growth Act of 1978 (also know as Humphrey-Hawkins Act), “16 and older” scale is the U3 rate that’s the headline unemployment number every month, if BLS still reports “20 and older”, I’ve never seen it. For what its worth, Humphrey-Hawkins also sets “not more than 3%” as the inflation target.
2. The “reservoir of jobs” is more of a suggestion than any sort of mandate. Quite intentionally, Congress required the President to come back and ask for further legislation to appropriate funds.
3. The original post-war legislation, the proposed “Full Employment Act of 1945″ had contained the automatic appropriation for a job guarantee, it was removed by the time the final bill (which also created the President’s Council of Economic Advisers”) was enacted as the Employment Act of 1946.
4. 1946 Act was watered down at the behest of the conservative Keynesians as exemplified by the Committee for Economic Development (led by former NY Fed chairman Beardsley Ruml and Boston Fed president Ralph Flanders, elected later that year as a GOP US senator from VT). From then on there was a schism between liberal Keynesians who wanted to fill output gap with jobs programs and social spending versus conservative Keynesians who wanted to fill output with tax cuts and military spending.
5. The essence of MMT is that the govt holds the currency monopoly which makes the budget deficit irrelevant so long as we’re short of full employment (0 output and 0 trade deficit) Or as Wynne Godley put it:
Carl Christ, of Johns Hopkins University, had the brilliant insight that should an economy ever reach stationary equilibrium, all stock variables as well as all flow variables would be constant; and that if all stock variables, including government debt, were constant, government receipts would have to equal government payments… There is an obvious shortcoming to the original Christ formula in that it applies only to a closed economy. This defect is easily remedied by adding exports to government expenditure (injections) and imports to taxes (leakages).” http://findarticles.com/p/articles/mi_m1093/is_n1_v41/ai_20485331/
6. The (liberal Keynesian) job guarantee would adjust “flow variables” on expenditure side, the (conservative Keynesian) automatic payroll tax holiday would adjust them on the tax side (in either case, the full employment goal becomes closer by accounting for trade deficit by either revenue-neutral tariffs or a cap and trade regime).Pragmatic Capitalism