Thursday, September 8, 2011

Wray & Kelton — "With $300 Billion The President Can Reduce Unemployment to Zero"

Randy and Stephanie have a post up at truthdig. In contrast to Warren Mosler's more comprensive program that includes a FICA suspension, block grants to states and a job guarantee, they focus on employment assurance, aka job guarantee (JG) and employer of last resort (ELR), as a primary means of addressing demand deficiency. MMT-based policy recommendations are getting out there.

UPDATE: Pavlina Tcherneva has a similar proposal up at Multiplier Effect, Creating Millions of Jobs on a Shoestring

UDATE: From the comments at truthdig (link)
If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.

“Oh America, how often have you taken necessities from the masses to give luxuries to the classes… God never intended for one group of people to live in superfluous inordinate wealth, while others live in abject deadening poverty.
“A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.

“We need to be concerned that the potential of the individual is not wasted,” he wrote. “New forms of work that enhance the social good will have to be devised for those for whom traditional jobs are not available.”
—Dr. Martin Luther King Jr.
(emphasis added)


GLH said...

Wray is exactly correct. If the government paid the minumum wage to 14 million people it would take less than 300 billion and that would only last until they went to work for private employers. KISS. Simple and brilliant, but what is the chance anyone in Washington can understand it?
I just read in a local paper this last weekend by one of our representatives- a woman name Lee- telling how the government wasn't responsible for the unemployed. I don't know how she keeps a job.

Matt Franko said...

We need to examine O's statements from this evening to see if his $300B program is going to have to be "paid for" or if they are going to do a new additional appropriation.

If all they are going to do is extend the FICA tax reduction past end of year and slightly increase aid to states, that wouldnt make much difference imo, but if this is 300B of addl balances over the next FY, that would be pretty substantial... Resp,

beowulf said...

Just left Pavlina a comment...
Well if Dean Baker and Kevin Hassett can make a joint proposal for a worksharing plan (an excellent idea BTW), you should contact Peter Ferrera. His idea of welfare reform is pretty on track with what you're suggesting.

"suppose all aid to the able bodied was in the form of an offer to work. Report to your local welfare office before 9 am and you are guaranteed a work assignment somewhere paying the minimum wage for a day’s work. A private job assignment would be the top priority. If you need more money come back tomorrow. If you have children with no one to care for them, bring them with you and they will receive free day care… If you work a minimum number of hours you get a Medicaid voucher that will purchase basic private health insurance. If you work for a continued period establishing a regular work history, you would be eligible for new housing assistance focused on help in purchasing your own home… These workers would continue to receive the EITC and child tax credits…
"The government could even reduce administrative costs to a minimum under this system. There would be no need to maintain and investigate eligibility requirements. If Warren Buffett wants to show up for a work assignment before 9 am, no big deal. Most importantly, this new system would effectively eliminate real poverty in America. Everyone would have a place to go where they could get an assured job and an assured in- come of $25,000 to $30,000 per year."
(2008, p. 9)