With more unemployed, the government collects less taxes which means it needs to increase taxes on everyone else.
More social programs are needed too, plus police & prisons when many of the destitute turn to drugs and crime. And more healthcare needed as poverty increases illness and stress.
Is there a better way?
Bill Mitchell - The Job Guarantee. MMT Episode 6
6 comments:
This is what you get when you ignore externalities and embrace bad priorities.
Actually, the problem isn't efficiency but an economic system that does not justly share productivity gains.
Yeah we need more prisons for sure....
Bill says "If a person thinks the Job Guarantee is an unnecessary add-on to MMT, then they haven’t understood the basics of MMT. It is as simple as that."
Conflation of two separate issues there: 1, the question as to whether JG is necessary, and 2, whether it is an "add on", i.e. essentially separate from the monetary aspects of MMT.
Warren Mosler said the two are separate, and I agree: i.e. it is perfectly possible to have JG without the rest of MMT and vice versa. E.g. they had a form of JG in the 1930s (the WPA) without the rest of MMT.
"Warren Mosler said the two are separate"
He didn't did he. The transition job is a central part of Warren's analysis. It's what sets the one price that everything else prices against. It provides income for people and a credible threat to private sector price hikers by setting that price.
It's only MMT with a Job Guarantee
"This ELR proposal is a logical extension of Keynesian and Post- Keynesian thought. Endogenous money is already deeply rooted, and the idea that an incomes policy need only be practiced by the government with its ELR wage should not pose any philosophical barriers. Nor should classical economists and their offspring be entirely against such an ELR program. If they are correct, there would eventually be an equilibrium condition with the ELR pool dwindling to 0."
http://moslereconomics.com/mandatory-readings/full-employment-and-price-stability/
From 1997.
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