Warren Mosler — Unemployment adds to the public sector

and not to forget that the unemployed *are* in the public sector, created by excess taxation, etc, whether the govt knows it or not.so going from 5% unemployment to, say, 3% jg reduces the size of the public sector.

Warren Mosler

Pragmatic Capitalism

Important point, often overlooked.

Warren adds this:

try this


if your goal is to maximize private sector employment, what i’m saying is you can get a lot more private sector employment with a jg buffer stock then an unemployed buffer stock, simply because an unemployed, less liquid buffer stock has to be larger than a more shovel ready jg buffer stock for price stability.

and i presume you agree that the amount of private sector employment you can get from fiscal adjustment is limited by the ‘monetary inflation’ that comes from allowing the buffer stock to get too small?

also, with a jg, fewer need be employed cleaning up after the unemployed’s destructive behavior, meaning they can be employed in more productive private sector employment.

and what, specifically, do you see as the negatives of, say, a 3% jg pool vs, say, a 5% pool of unemployed at ‘full employment’?

Seeems that extra 2% working productively in the private sector, responding to price signals/aggregate demand, is worth quite a bit from any angle?

Warren Mosler

Pragmatic Capitalism

Warren's "last word" on the subject:

My proposals remain

1. A full FICA suspension to restore aggregate demand


2. 150 billion revenue for the state govs on a per capita basis to
get them over the hump


3. A federally funded $8/hr transition job for anyone willing and
able to work to assist in the transition from unemployment to private
sector employment.

You can omit 3. If you want, but don’t blame me if inflation kicks up
with unemployment still over 6%!


Thanks!
/Warren

Pragmatic Capitalism