Read it at Multiplier Effect
Back in 2009 Martin Shubik sketched out a plan in a Levy Institute policy note for creating a “Federal Employment Reserve Authority“—a kind of Fed for employment (yes, I know: the Federal Reserve is the “Fed for employment.” But you don’t need to look very hard to see that the sides of the dual mandate aren’t equally weighted). Among other things, the FERA would maintain state branches that are charged with keeping updated and prioritized lists of potential public works projects (with a preference for self-liquidating projects) and providing constant monitoring and evaluation so that financing can be put in place as soon as unemployment reaches a particular trigger level in that region. Regional public investment would respond to objective employment conditions.
The “Shovel Ready” Excuse and a Fed for Public Works?
by Michael Stephens
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5 comments:
FERA, ehh The acronym is wrong. An "Authority" is a public corporation established by Congress (or a state govt).
What we need is FRET, Federal Reserve Employment Facility, a 13(3) facility that lends to state governments. No reason to get Congress involved and by dealing directly with state government, the Fed banks would be agreeable 10th Amendment-minded.
I like that idea, beowulf. Providing direct funding to the states counter-cyclically is what's needed and all the "shovel work" is going to be at the state level. They may as well administer it locally.
Beowulf,
Your suggestion is similar to Warren Mosler’s suggestion that Federal money be distributed to states, I think.
Right and this type of thing is within Fed mandate of "maximum employment".
The Fed can take matters into its own hands and facilitate employment increases more directly with I guess here what would be considered 'horizontal money'...
But instead the only "out of the box thinking" we get from moron Bernanke is his lecturing Congress on the need for so-called 'fiscal sustainability'... the Fed is a disgrace.
Interestingly, Bill and Warren did a paper on essentially this idea for a panel we did in Spain back in 2006.
http://e1.newcastle.edu.au/coffee/publications/wp2.cfm?id=97
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