Mosler: 8 million jobs were lost because sales collapsed. We need to restore sales by businesses with my...

Mosler: Manufacturing jobs are not the answer. The world has moved on:...

Mosler: I don't say MMT=JG. That would be mixing metaphors. I do make the case that a JG transition job is critical to optimizing output and prod ...

Mosler: Private sector by being unemployed and deemed unemployable. A JG transition job adds to the available labor force of the private sector.

Mosler: Yes, just count bodies in the JG transition job and adjust accordingly to keep it at a minimum! ;)

Mosler: Remember, top line (sales) growth must exceed productivity growth to get more jobs.

Comment: We’re debating a universal guaranteed income. You should come!

Mosler: Far more constructive to offer a federally funded fixed wage transition job for anyone willing and able to work!

Mosler: Jobs and income charts 'don't p on me and tell me it's raining'.

Mosler: So if the ballpark accepted only work (not $) for tickets, who would 'create' those jobs?.

Mosler: Read this to understand the JG thanks!

Mosler: For Turkey: 0 rate policy, target a JG pool at 3% with fiscal policy, no fx sales, narrow banking, free healthcare, free education, etc.

Comment: This not about JG vs BIG. Its about JG vs unemployment and BIG vs traditional welfare.

Mosler: Not to forget JG functions to facilitate the transition from unemployment to private sector employment.

Mosler: Good thing, the 1,200,000 benefit losers got jobs or payrolls would have been down a million... ;)

Mosler: So the EU says the south is lazy and doesn't want to work? And so the EU imposes policy that destroys their jobs so they can't work???!! :(

Comment: Hey warren, you've gone mainstream, what are you gonna do now?

Mosler: Push for payroll tax holiday and a reabsorbed job. ;)

Mosler: Jobs are real costs of production, not benefits!!!

Mosler: More jobs/less GDP? Fire $125k exec, hire 4 $25k yacht cleaners (service sector pay counts as GDP) :(

Comment: It's time to dethrone the dollar & bring back the jobs.

Mosler: Imports real benefits, exports real costs-so cut taxes and/or hike spending to boost jobs instead of dethroning $US!

Comment: August Employment Report: 142,000 Jobs, 6.1% Unemployment Rate.

Mosler: The "1.2 million lost benefits at year/took menial jobs" phenomenon ran its course and now reversing narrative intact :(

Mosler: Today's job correct. H1 new jobs were 'inflated' by 1.2 million year end benefit losers who took menial jobs.

Mosler: Jobs peaked 5 months ago, incomes stalled for most people, mainstream in denial.

Comment: Time for progressives to stand with us--unions and #TeaParty--in securing #border, ending #amnesty, and defending American #jobs and wages.

Mosler: And my proposed permanent payroll tax holiday would result in higher paying jobs for all who want to work, and lower prices!

Comment: 6 policies to reduce economic inequality - @HaasInstitute.>

Mosler: @HaasInstitute misses biggies/limit tsy to 3month bills/no FICA/Fed funded transition jobs/ narrow banking/etc/kill it at source!

Mosler: Start with a federally funded transition job for everyone willing and able to work and an appropriate fiscal relaxation.

Comment: Can you weigh in on how a proper JG is a superior alternative to "raising the federal minimum wage"?

Mosler: JG facilitates the transition from unemployment to private sector employment.

Comment: What Can Emerging Markets Do to Protect Against Hot Money? Not Much.

Mosler: How about no FX debt, full employment fiscal with a transition job, and a 0 rate and floating FX policy.

Comment: Right. Bottom line: If you want more jobs, higher wages, support #TeaParty in opposing #amnesty. #tcot.

Mosler: My first choice for even more jobs and better wages is suspending those regressive FICA taxes ;).

Comment: QUARTERLY INCREASE IN U.S. WAGES SMALLEST IN RECORDS TO 1982.

Mosler: High wage jobs lost in energy sector contributing?

Mosler: Not to forget the JG works to lower inflation!

Comment: Profit/wage ratio high as ever. Lets TILT playing field towards companies that pay workers more. Good piece in FT.

Mosler: i.e. a universal federally funded transition job for a wage floor and sustained full employment fiscal policy.

Comment: "China’s de facto tariff... has cost the U.S. billions of dollars and millions of jobs."

Mosler: Remind him exports= real costs, imports= real benefits, it's about real terms of trade, + jobs are about fiscal.

Comment: Could you, in your usual laconic manner, explain the ELR/JG proposal, again, please? :-)

Mosler: It's just an offer of a federally funded transition job for anyone willing and able to work.

Comment: @NEF looking for a new Chief Economist and Economist - Financial Reform.

Mosler: I applied for the job. Looking forward to an interview. ;)

Mosler: The present value of the lost income from lost jobs was far higher and ALL from policy response failure.

Comment: The belief that you can create jobs without creating new debt underscores a serious conceptual fault (forthcoming): A T-shirt model of savings, debt, and private spending: lessons for the Euro area Andrea TerziFranklin University Switzerland, Sorengo, Switzerland and Levy Economics Institute of Bard College, Annandale-on-Hudson, NY, USA Notwithstanding the modified ECB practice that saved the day, the euro area is failing to restore economic prosperity. The problem is visibly political, yet an effective solution must be economically viable. This essay articulates the reason behind the prolonged deflationary bias of euro area policies by means of a simple (T-shirt') model, where private spending depends on desired savings and sustain able indebtedness. This savings-debt constraint means that any policy that inhibits debt also inhibits financial savings, spending, and jobs. After providing a solution to the conundrum of the consequence of savings in a monetary economy, this essay makes a case for reclaiming the fiscal instrument. The EU Commission's belief that it is possible to create jobs without creating new debt underscores a serious conceptual fault and a delusion that the savings-debt constraint to spending can be ignored. As long as policy-makers defy the savings-debt constraint, the euro area will continue to live dangerously.

Mosler: And to your point, the distinction between creating jobs and reducing unemployment is most often overlooked.

Mosler: Its one option but I'd prefer a FICA cut, soc sec payment hike, and a universal transition job offer.

Comment: Because they can't say no, because presently work is coupled to income. There is no individual bargaining power right now.

Mosler: Even with a federally funded transition job offered to anyone willing and able to work?

Comment: Wage increases and productivity have not kept up.

Mosler: A federally funded transition job for anyone looking for work = increased private sector employment, sales, and investment.

Mosler: Exports are real costs, imports real benefits. Sustain good paying jobs and real terms of trade via tax cuts or spending increases.

Mosler: Bernie/Donald: Corporations that move jobs to Mexico, create fiscal space for your infrastructure proposals!

Mosler: Far better to support demand with fiscal policy so there would be good paying jobs for all desiring work.

Comment: Best is with a lighter regulatory burden. Doesn't create market distortion.

Mosler: Regulatory changes can promote efficiency but don't add to aggregate demand/jobs/etc.

Comment: Read The Basics about Basic Income.

Mosler: True but doesn't help unemployed get jobs or otherwise reduce unemployment.

Mosler: Misses the point that getting paid to dig your own grave counts as a job... ;)

Comment: Using Fiscal Policy to Drive Trade Rebalancing Turns Out To Be Hard: @Brad_Setser.

Mosler: Use fiscal policy to sustain full employment and a gov funded transition job- then optimize real terms of trade.

Mosler: Better to call it a guaranteed transition job to promote the transition from unemployment to private sector employment. ;)

Mosler: New post: Philly Fed State index, Pending legislation, North Korea, Basic income.

Comment: Can u expand on what u mean regarding UBI & not understanding monetary system?

Mosler: Far better to offer a federally funded transition job + fiscal adjustments. UBI ok/safe only if small and doesn't promote employment.

Comment: Would stay@home mums qualify for Job Guarantee & BI in an ideal MMT world? Or are we not "Employment ready"?

Mosler: For me supporting moms is investment that well serves public purpose. My proposed support is separate from my proposed transition job.

Comment: Alongside care for elders, disabled & community activities? For as long as it needs doing? Or for a fixated period before work?

Mosler: I see those as 'normal' public sector employees, not 'transition jobs' which are to promote the transition from unemployment to private sector employment.

Mosler: Yes, therefore my fed funded transition job etc.

Mosler: Our transition job proposal is advancing through the European Parliament!.

Comment: Honest q: with inflation below but fairly close to Fed's 2% target, how many more jobs possible via Jobs Program?

Mosler: Nothing lost if you offer a job to anyone willing and able to work and no one takes it, right? So not a reason not to do it! ;)

Mosler: In support of my proposed Federal transition job.

Comment: Imagine thinking that offering jobs in a world in which the pvt sector doesn't create enough of them is "too grand and too bold" compared to just leaving people unemployed involuntarily.

Mosler: "A world in which tight fiscal policy doesn't allow the private sector to create the jobs." ;)

Comment: I'm still waiting to see ONE person outside of those already advocating for a universal JG to admit there are macroeconomically significant costs to existing involuntary unemployment that "may" rival any "cost" estimate of JG.

Mosler: Jobs are real costs. ;)

Comment: One thing I like about the Job Guarantee debate is that it represents an ideological evolution beyond the internet-standard MMT debate. It's like, ok, everyone agrees that popular notions of fiscal constraints are wrong. But now that we know that, what should we spend money on?

Mosler: The real gross cost to others of the job guarantee is the increase in real consumption of the participants which is most likely to be trivial.

Comment: So far all published critiques of JG assume US currently @ full employment. Disingenuous to not engage our work on that.

Mosler: And in any case the easiest time to implement JG is when the economy is presumed to be at full employment, recognizing there are never real costs, and only real benefits.

Comment: It's phenomenal how the left wants the #jobguarantee to meet some purity test of policy effectiveness, a standard never applied to any other progressive policy (tanf,snap,EITC, etc), ignoring the wholesale structural improvements the #JG makes to labor markets & people's lives.

Mosler: Try promoting it as a transition job designed to promote the transition from unemployment to private sector employment, and at the same time function as a superior price anchor... ;)

Mosler: The problem is you're promoting the job per se rather than making the point the transition aspect.

Comment: Don't see promoting jobs for those who need them as a problem :). Some will not transition.

Mosler: Understood but people hear that as an expansion of Gov

Comment: So many JG critics seem to think technical details come first, ignoring all the literature in public policy, biz strategy, etc.--i.e., fields that do change implementation on a regular basis.

Mosler: Me too. And there are other people who value the core monetary aspects of JG who are also voters, such as transitioning people from unemployed to private sector employment and enhanced price stability.

Mosler: This 1997 article continues to provide the fundamental support for today's JG proposals: Full Employment AND Price Stability - The Center of the Universe.

Comment: You would think that MMTers would be psyched that the US is getting BOTH huge tax cuts & massive spending increases, but the silence in the MMT 'academic' community has been deafening. Perhaps the FAKEMMT 'scholars' should have gotten their PhDs in politics instead of economics.

Mosler: The guaranteed transition job, as I've termed it, is to promote the transition from unemployment to private sector employment, as all studies show private sector employers prefer to hire people already working, and also to provide a superior price anchor.

Comment: Market Power, Low Productivity, and Lagging Wages: The Real Drivers: To understand labor productivity—and growing inequality—you have to look at the “dual economy”.

Mosler: Again, the 'labor market' is not a 'fair game', as people need to 'work to eat' while employers only hire if they like the 'profit prospects', so without some sort of 'support', real wages tend to gravitate toward subsistence levels.

Mosler: Historically support for labor has come from unions, minimum wage laws, etc. Currently I prefer using the JG (transition job) to support wages and introduce benefits from the bottom up, along with 'high demand' fiscal policy to minimize the number of JG workers.

Comment: Mainstream Macroeconomics and Modern Monetary Theory: What Really Divides Them?

Mosler: My latest "JG" paper with Prof. Silipo was published in 2017 in a leading mainstream journal, so seems calling it unorthodox is no longer applicable?

Comment: As @wbmosler says “it’s like that joke: 2 hikers r startled by a bear, 1 hiker tightens the laces of her running shoes, the other says: ‘U can’t outrun a bear!’ ...‘I don’t need to outrun the bear, I just need to outrun you’”. The JG is the 1st hiker. It’s better than what we have.

Mosler: Yes, as a point of logic, the JG only needs to be not worse or marginally better than any aspect of unemployment- which it is- to immediately implement it.

Comment: Time for Sen. Sanders to introduce federal legislation imposing large, graduated penalties on any corporation engaging in such practices (TPH, etc).

Mosler: Better done via a federal job guarantee that pays $15 per hour.

Comment: To argue that the JG would be the "single largest government intervention in US economic history" betrays the author's poor understanding of history.

Mosler: Taxation is the intervention that creates unemployment by design for the further purpose of the state being able to hire those it's tax caused to be unemployed. The JG works to transition the unemployed back to private sector employment and optimize output.

Mosler: The state sets the policy rate at 0 and offers a state funded transition job to all takers to both facilitate the transition from unemployment to private sector employment and enhance price stability, and adjusts fiscal balance to minimize the number of transition workers.

Comment: Fifty-two percent of American support a federal Job Guarantee, even more so if those jobs help mitigate and adapt to climate change. Sixty-six percent support Green New Deal-style proposals."

Mosler: I see those jobs as "standard" Gov jobs with standard federal pay and benefits etc. The JG isn't meant to replace/undermine "normal" Gov employment.

Mosler: For example, to get the 15m employees for the Green New Deal: Medicare4all sheds maybe 5 million workers; a 0 rate policy, narrow banking, and keeping insured pension funds out of stocks millions more; and maybe 5 million can come from people currently unemployed.

Comment: Where does the m4all estimate come from?

Mosler: Estimates are for up to a $1 trillion reduction of the total cost of healthcare. So 5 million jobs is conservative.

Comment: It’s on - #GreenNewDeal is now picking up steam in the Senate. I had an incredible time with @SenMarkey today, taking notes on his ‘07 Select Committee and how we can leverage past work into pushing for a GND today. He’s in. Thank you Sen. Markey for your climate leadership.

Mosler: Not to forget that even green jobs are real costs and not benefits. There is always more to be done than there are people to do it. Efficiency and productivity are about getting the most output from the fewest inputs.

Mosler: And the JG provides for a superior price anchor than today's unemployment policies. That is, the JG is an anti inflation policy that at the same time supports output.

Comment: The economy is not a closed loop. Global capitalism has lifted millions of people from poverty around the world, and continues to do so by creating jobs in manufacturing. Profits from re-exporting these products funds new jobs.

Mosler: Jobs are the real costs. It is real consumption of real output that ultimately defines poverty and the standard of living.

Comment: Here’s @StephanieKelton explaining Modern Monetary Theory to @zbyronwolf.

Mosler: How about "Yes, and MMT is the only analysis that understands the source of the price level and recognizes the JG as a superior price anchor to unemployment."

Comment: Nothing has been more exciting than the last week. It's unbelievably riveting to watch MMT and AOC come together to defend a Green New Deal and a Job Guarantee.

Mosler: Yes, because the Job Guarantee is a superior price anchor to unemployment, the economy can be run that much 'hotter' to get the GND done.

Comment: MMT puts price stability at the core of its approach. It guards against inflation *ex ante* by insisting that the budgeting process itself evaluate inflation risks *before* appropriating any new spending without offsets.

Mosler: And opens the door for superior price stability vs current policy, by replacing unemployment with an employed labor buffer stock policy popularized as the Job Guarantee.

Comment: Again, price stability of what? Because if you're not counting everything that money can be spent on, then you're not quantifying the real consequences of money creation.

Mosler: In a market economy, you only need to set one price and let the rest reflect relative value. That's what the JG wage does and my point is that it does it better than unemployment.

Comment: Exactly! I wrote about this regarding IP from Job Guarantee labor, but logic also applies more broadly. If research in science and useful arts is financed by public money, the fruits of that research should be made available to the public.

Mosler: The JG serves public purpose as a superior ("anti inflation") price anchor vs unemployment while removing most of the negative externalities of unemployment.

Mosler: From a pure monetary perspective, the purpose of JG is to provide a superior anti inflation price anchor when compared to unemployment, by facilitating the transition from unemployment to private sector employment. Who is against that???

Comment: Guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all....

Mosler: (i) to stop the transfer of jobs .... overseas; and (ii) to grow domestic manufacturing in the United States;:(

Comment: This is just a pure, naked appeal to hierarchy. If you don't want to read the academic literature because it doesn't appear in highly enough ranked journals that's fine but take your anti-intellectualism elsewhere and stop talking about MMT all together.

Mosler: Not to forget my 2017 paper on the jg was published in a leading mainstream journal.

Comment: I have shared the short version of this many times. We had some back & forth today about "offsets" 2 spending. Is it safe 2 say that we don't need 2 START #Med4all w/new taxes - but might need to offset w/tax in future? Thx.

Mosler: It's a possibility but not a certainty, as the deflationary drop in unit labor costs for heathcare is substantial, as is the deflationary bias of all those losing their jobs with private insurance companies.

Comment: Yes. And would just emphasize Nathan's point: there is more to MMT's inflation-fighting toolkit than solely raising taxes. The emerging consensus, following Mason/Jayadev and then Barro, to reduce MMT to Lernerism is pernicious and false. MMT was talking Minsky before most.

Mosler: And the MMT 'inflation-fighting tool kit' begins with the Job Guarantee which immediately provides the monetary system with a superior price anchor than today's unemployment, as it facilitates the transition from unemployment to private sector employment.

Comment: I'm not against a JG, although I do think it's possible it could lead to "make-work" jobs, although these jobs might still be better than the supposedly necessary jobs that are destroying the climate and ecosphere.

Mosler: The 'monetary purpose' of JG is to 'fight inflation' by facilitating the transition from unemployment to private sector employment. It is effective because employers don't like to hire the unemployed, and prefer to hire people already working.

Mosler: CB's believe rate hikes fight inflation, but say with high public debt, rate hikes= higher interest pymts= inflation, so using fiscal to fund a JG=no option to hike rates to fight inflation. I say THEREFORE they have it backwards and lowering rates fights inflation=no problem with JG.

Comment: The impact of a JG in increasing efficiency/productivity and therefore push down interest rates?

Mosler: Just means, funding a JG doesn't take away the ability to fight inflation with higher rates as critics fear, because in any case higher rates cause inflation, rather than fight it.

Comment: JG wage wd not be indexed. They admit JG wd be inflationary if it were. Tcherneva talked about revaluing JG wage once every 10 years. Unless inflation is zero or below, that is 10 years of real income erosion for the poorest workers. Makes the UK's benefit freeze look benign.

Mosler: More precisely, any increase in the general price level caused by an increase in the nominal JG wage is a onetime event and not inflation which is a continuous rise in the price level.

Mosler: And not an issue with my JG implementation proposals...;)

Comment: MMT is a perspective and Job Guarantee is a policy proposal. MMT doesn't force people into anything apart from changing the way they view and describe the monetary system.

Mosler: Unemployment and the JG are Govs policy responses to those that its tax has shifted from the private sector.

Comment: If we replace income taxes with a real estate tax 1) wouldn’t it have to be very high? and 2) it wouldn’t be countercyclical, so the number of JG workers would fluctuate much more?

Mosler: Maybe 5 or 6% of value. And JG volume probably depends more on other factors.

Mosler: In combo with full coverage Medicare4all, free public education, a full JG, narrow banking, $2,500/mo. minimum social security, etc. it's deflationary, and more than doubles the real standard of living of the "bottom" 50%.

Comment: In which I examine an MMT model in detail.

Mosler: And this is my mmt paper on the transition job (JG) published in a leading mainstream journal: Maximizing price stability in a monetary economy.

Comment: Unemployment is really hard to implement without wasting a ton of money, output, and lives, but we're doing it anyway. The JG is always cheaper than the alternative, which is what we have now.

Mosler: And it's a better inflation fighter.

Comment: Disney CEO explains how profits from merger w/ Fox will come from massive layoffs. As usual, layoffs' costs to workers, their families, & communities does not matter to capitalist. Private profits are far less than social costs but the profiteers decide.

Mosler: Jobs are real economic costs of production, not benefits. The crime against humanity is the state not supporting aggregate demand (total spending) at levels high enough to ensure business profits from providing well paid employment to displaced workers, etc.

Mosler: Jobs are 'costs,' not 'benefits'.

Comment: So if Treasury had just issued more deposits-then-swapped them-for-bonds onto private-sector balance sheets, increasing PS assets and NW ("stimulus"), that would/wouldn't have done the job absent Fed then swapping reserves for the bonds (which does not affect in PS As/NW)?.

Mosler: Done what job? For all practical purposes, the duration of outstanding CB liabilities is of no consequence.

Comment: Tomorrow! Join us in person or tune in.

Mosler: Remind everyone that, for example, when Sears reduces staff by 3500 or "jobs move to China" etc. people are being "freed up" for GND employment. ;)

Comment: I thought it was good. One thing I heard (I may misunderstand) was that MMT only refers to the prescription, not description. Did you hear that?

Mosler: MMT is descriptive and from there, I derive a "base case for analysis" that includes a 0% policy rate and a JG.

Comment: McDonald's has spent $22 billion on stock buybacks. Its CEO makes more in an hour than the avg McDonald's worker makes in a year. It made over $6 billion in profits in 2018Its low wages cost taxpayers $1.2 billion a year. It can afford to pay all of its workers at least $15/hr.

Mosler: Public purpose is better served by a $15/hr JG or even an increase in the Federal min wage.

Comment: "Eleven million people around the world were employed by the Renewable Energy sector in 2018, the International Renewable Energy Agency (IRENA) reports from their latest analysis”.

Mosler: Not to forget that jobs are real economic costs. They are "inputs."

Comment: A few social media ideas for public servants looking to build an audience:- Endorse Single-Payer Medicare for All- Hold Wall Street Accountable- Make Min Wage = Living Wage- Cancel Puerto Rican Debt- End For-Profit Prisons & ICE Detention- Fight for a Green New Deal - Support a Federal Jobs Guarantee- Bailout Student Debt- Legalize Marijuana & Explore Reparations, Baby Bonds.

Mosler: The first candidate to recognize Medicare for All is a deflationary event that not only doesn't beg a tax increase, but, to the contrary, is what 'pays for' the rest of the progressive laundry list, leapfrogs to the head of the class.

Mosler: Likewise for the first candidate to recognize that the Job Guarantee in the first instance provides for superior price stability vs unemployment, thereby adding to fiscal space crucial to 'paying for' the GND, free higher education, etc. etc.

Comment: The most promising growth sector of today's economy. Picture Republicans calling internal combustion ‘a hoax’ when Mr. Benz began selling his horseless carriages in the 1880s and you’ll get a glimpse of the significance of rightwing backwardness right now. 11 Million People Now Have Jobs In Renewable Energy.

Mosler: It's critical, and I support it, but bragging rights are best awarded to getting it done with fewest number of labor hours. Jobs are real economic inputs and costs society. The benefit to society is the output. Think productivity! ;).

Comment: This is not "economic nationalism." What it is, is a country taking it upon itself to lead the way and show the rest of the world what can be done to address climate change. It's a lot easier to get your own country to do something than it is to get a bunch of countries to do it.

Mosler: The sooner they all get it through their heads that jobs are real economic costs and not benefits, the better... :(

Comment: Thea nicely summed up the cringey part of Warren's brief bit about industrial policy (!!) last night. If we really think the climate crisis demands a global response - it does! - the US can't "own" it: I appreciate @ewarren pivoting from a question about jobs to the renewable energy transition, framing climate change as an issue of political economy & social equality. But I am disappointed with the economic nationalism that continues to pervade her thinking on these matters.

Mosler: Except the jobs are a real economic cost, not a benefit. :(

Comment: In place of, or in addition to, a property tax? In general, it is not a bad thing to tax land, but you do run into the problem that many people (mostly older) cannot afford to buy the place they live in.

Mosler: That's why I link it to a job guarantee so no one is 'in the streets' from unemployment.

Comment: OK with us. We took that *on board* years ago. But can you please use car metaphors if you're going to enter this thread?

Mosler: Ok, how about: going from unemployment as a buffer stock to an employed buffer stock (JG) is like upgrading the engine oil to reduce friction, reduce heat, and increase fuel efficiency. ;)

Mosler: I've proposed a permanent 0% policy rate (via a net long reserve position and no interest paid on reserves) and the treasury limited to 3 month bills, as this requires no change of institutional structure and can immediately 'get the job done'.

Comment: Donald Trump’s economy might work for CEOs and the top 1%, but it has left hundreds of millions of workers behind. I just released a new plan that will raise wages, strengthen unions & check corporate power.

Mosler: The job guarantee does all that and more, Jay. Let's talk!

Comment: Attempting to manage inflation on the backs of the unemployed is insane and unjust. This is why we need a federal jobs guarantee.

Mosler: And worse, the JG is a superior price anchor vs unemployment. There is no logical reason to not implement a JG asap!

Comment: The Case for a Guaranteed Job by Robert Skidelsky - Project Syndicate.

Mosler: ??? The govt. created unemployment, by design, by imposing tax liabilities, for the further purpose of provisioning itself by spending it's otherwise worthless currency. Residual unemployment is the evidence that the tax liabilities created more unemployed than the Gov hired.

Mosler: Assuming Gov is fully provisioned, it can 'correct its mistake' by lowering the tax until they return to the private sector. The JG promotes that transition from unemployment to private sector employment because employers don't like to hire the unemployed, etc. etc.

Comment: You've convinced me on this as well. However, it does not account for the externality of environmental degradation. A benefit of offshore manufacturing is the ability to produce it in a country with crap enviro policy (because it wants the "jobs"), no?

Mosler: That would be grounds for restrictions, but not 'lost US jobs.

Comment: Freedom means I can choose Coke over Pepsi.

Mosler: Capitalism exists and functions within the context of public infrastructure (presumably) for public purpose that can include defence, legal system, payments system, M4all, free education, JG, etc. and limits and rules for private markets.

Comment: What do you recommend here other than eliminating T-bonds?.

Mosler: Narrow banking, eliminate equity ownership for fed insured pensions. JG with living (real) wage/benefits. Campaign finance reform- (say) 40% of donations go to the opposition. Eliminate private jet travel. Corporate governance reform. Just getting started!!!!

Comment: Learn how to read friend or your desperation is really showing. Either way not interested in such a childish conversation.

Mosler: This is the ideal time to implement a JG. Much easier to manage and work out any rough spots when subscription is minimal. ;)

Comment: This is going to be unpopular, but it's true. Being political independent in a capitalist economy starts with a job guarantee, not entrepreneurship, because being an entrepreneur presupposes that your business can fail, without you losing your social or political independence.

Mosler: In the MMT 'money story' that begins with a state desiring to provision itself, the base case for analysis includes a 0% rate policy and a job guarantee. There is no conflict with entrepreneurship.

Comment: Here's what: If the precious market doesn't want 20 million workers, then the national government can buy up those 20 million workers and put them to good use in local communities. If the market doesn't want them, then why the hell should "the market" care who buys them and what these workers do? If, one day, "the market" needs these workers, then it can pay a premium for them. You know, "demand" and all that.

Mosler: Not to forget that govt. fiscal balance is what caused them to be unemployed in the first place, and by design, presumably so govt. could hire them. Hence the JG to facilitate their transition back to the private sector.

Comment: Indeed. It seems that the local currency can be cleverly designed (turn unemployment caused by € into full employment + drain on country’s €). It wouldn’t be sustainable because they’d eventually run out of € to pay for the ECB’s surplus. Am I thinking about this right?

Mosler: You could create more employment but there would be people looking to work for euro who can't find euro paying jobs and suffering accordingly.

Comment: The jarring spike in uninsured claims during a deadly pandemic is about to force a reckoning about the U.S. system of making health coverage dependent on one's employer. It's a unique concept in the developed world.

Mosler: Nor have I ever heard of any economist who thought healthcare should be a marginal cost of production, apart from jobs that actually cause a need for employee healthcare. Particularly when employment, in general, promotes better health.

Comment: Warren, @wbmosler, how important is the survival of private sector from this monumental shock, for the good of economy? Private sector is an integral part, isn't it?

Mosler: Yes. And in an institutional framework that directs it towards serving public purpose.

Comment: (otherwise, JG itself may not be possible). Then, what is wrong with the bailout for private sector also? After all, it is public purse for public purpose! But, if it is given, only on public terms!

Mosler: Private sector firms compete for consumer spending. My proposals sustain public services, strategic private firms that would otherwise fail, seniors, and employees and owners of private firms at a personal level. Note that 'strategic' is a political choice.

Comment: Yes, those failing need to be nationalized, otherwise real wealth would disappear. Or those strategic firms need to be nationalized and let other non-strategic firms to fail? And a new responsible private sector will emerge & serve the public purpose? Non-strategic ones need to be bailed out also, isn't it?

Mosler: I propose to support the state govs and owners and workers with unemployment and available jobs to sustain demand, and banks, state and local govs, and other lenders decide on which businesses to support.

Mosler: Yes to rebuilding desired infrastructure, but always efficiently which means a minimum of jobs as jobs are real costs for an economy, and regardless of what the policy interest rate is.

Mosler: JG facilitates the process of the state provisioning itself, while UBI can pose a threat to state provisioning.

Comment: Maximizing price stability in a monetary economy.

Mosler: That's my MMT/JG proposal for the ECB published in a leading mainstream journal in 2017, Damiano Silipo, Calabria, co author.

Mosler: Higher prices shift way more $ from hundreds of millions of US consumers to oil companies than all the salaries of any lost oil jobs, and those weaker consumers=weaker economy. But hopefully it's not enough, producers cheat, etc. and prices instead fall further....

Mosler: $s to pay taxes originate only from the state or its agents, so value is a function of what you have to do (at the margin) to get them. With JG marginal cost is your time. With UBI it's 0.

Comment: I’m not JG fan either, as I view govt’s role as “fairness” over “efficiency.” I don’t think long term growth would benefit from increases in state workers. But, I do support increased fiscal spending during recession- preferably on infrastructure/education/healthcare.

Mosler: JG functions first to facilitate the transition from unemployment (necessarily caused by Gov. tax liabilities, by design) to private sector employment. You are against that???

Comment: What federal policies could Congress pass to most directly address the roots of the public anger sweeping across American cities?

Mosler: Mandatory police body cameras and a $15/hr job guarantee.

Comment: idk, the way I see it is, unspent income is the cause of unemployment and the solution is the issuer increasing spending\reducing taxes.

Mosler: Hire as needed for 'normal' public sector employment, and fund a transition job for anyone willing and able to work to facilitate the transition from unemployment to private sector employment, as the private sector prefers to hire those already working.

Comment: So I wouldn't get hung up on a jobs guarantee. If everyone would understand the basics of MMT, there are lots of ways to skin the cat.

Mosler: I call it a transition job. Have you read my White Paper?

Comment: Wednesday’s blog post (15/07) is now posted (18:37 EAST) - MMTed Q&A - Episode 7 - featuring Dr Pavlina Tcherneva discussing the Job Guarantee with me.

Mosler: My comments: 1. Unemployment defines minimum 'fiscal space'. 2. Job Guarantee does not reduce the ability to import. 3. Currency depreciation does not reduce the ability to import or reduce real wealth, however it does alter internal distribution.

Comment: My takeaway after listening again is that the JG workers should be provided to charities and non-profits and that those organisations will direct their work until they transition back to the private sector. Do I have it right?

Mosler: Federal funding of non profits for wages of workers they hire at JG wage, etc.

Comment: Warren, you're missing a whole class of models where markets do not clear in the conventional sense. See work of @farmerrf in particular.

Mosler: Seen it, thanks. Animal spirits is about private sector deficit spending/changes in savings desires. Asset support attempts to support private deficit spending but the (unlimited) option of public deficit spending can always eliminate unemployment for example by offering a job to anyone.

Comment: MMT does not advocate 0% rate. MMT does not advocate anything; it simply describes the operational abilities of the central bank and the consequences of monetary policy choices. People can use the realities of state finance, on which MMT sheds light, to advocate various policies.

Mosler: I use the permanent 0% policy rate and a JG as my base case for analysis when telling the money story, and when setting up local currencies like the UMKC Buckaroo, Franklin Franc, Dennison Dollar, etc.

Comment: "Spending on the Job Guarantee is, like all spending inflationary, which means to stay within limits the JG may need to be reduced in times of high inflation?".

Comment: Don't forget JG Gov/monopolist spending is on a price constrained basis which prevents deflation and doesn't cause inflation by definition. And a shrinking JG pool "automatically" evidences increased demand.

Mosler: Which could have been done, and 10x more, with 'normal' public service employment!

Comment: I don’t support the job guarantee on the basis of how it might benefit the private sector. So I prefer placing the benefit on people at the forefront of my priorities.

Mosler: Agreed! Taxation causes unemployment, so Gov can then hire them to fully provision itself as mandated to serve public purpose. If unemployment remains after said Gov hiring, they need to transition back to the private sector, which doesn't like hiring unemployed. Enter the JG! :)

Comment: We urgently need New Tools to Measure Economic Recovery after Corona virus.

Mosler: Just do a JG and count bodies in the pool, relaxing fiscal (increased public services, lower taxes, etc.) until it's down to maybe 2% of labour force. Piece of cake!.

Comment: The MMT insight - which is literally what created it as a body of theory - is that a JG can be used as a buffer stock approach to stabilise wages. Saying the JG is not part of the theory just says that you don’t understand the theory.

Mosler: Because employers don't like to hire the unemployed, but prefer instead to hire people already working, the JG promotes the transition from unemployment to private sector employment, thereby establishing a superior price anchor/buffer stock vs unemployment.

Comment: Idea: we hire 3x as many teachers in America and reduce the class size to six to eight students--which is how we Greeks designed schools at the start. This would add ~9m jobs~$60k all in = ~$600b a year = ~$1,800 per American+ reduces unemployment & grows tax base. Discuss!.

Mosler: Jobs are real costs of production, output is the benefit. Think productivity.

Comment: Lol? Apparently Bill Mitchell is an anarcho-communist now. Him and @wbmosler must be very strange bedfellows.

Mosler: My proposals generally have universal appeal. My 2011 payroll tax holiday was the only legislation passed by the Obama administration with bipartisan support, for example, and John Carney (Breitbart) supports our JG proposal, etc.

Comment: For 55 cents, USPS will deliver a letter anywhere in the country quickly and reliably. It offers more than half a million workers — 40% Black, Hispanic, and Asian — good wages and a dignified retirement. Private businesses should act more like USPS, not the other way around.

Mosler: I support funding the USPS, but don't forget jobs are real economic costs, and not benefits. The fewer people it takes to get the job done, the better off we all are. There is always more work to be done, public and private, than there are people to do it.

Comment: Pandemic Labour and the Politics of Job Guarantees.

Mosler: As per the links I tweeted, the JG functions to promote the transition from unemployment to private sector employment, as the private sector prefers to hire people already working, etc. a process that- to your points- sustains 'loose' full employment.

Comment: True, but we also need a job guarantee so those who want work can be employed. The salary paid will set the effective minimum wage and will be the price anchor required to maintain stability.

Mosler: Gov in any case can hire anyone it wants to. We need a JG to transition those Gov doesn't want to hire from unemployment to private sector employment.

Comment: There's a difference between a core theoretical tenet, and a core proposal. JG is a proposal in the context of core tenet, eg, a nominal price anchor set by fiscal policy where no solvency constraint exists. But I'm done here.

Mosler: My base case for analysis/clean sheet of paper model includes/begins with a permanent 0 rate policy, no Treasury securities, and a JG to provision the state, and from there subsequent modifications are considered.

Comment: Let's ask the man himself. @wbmosler, does MMT say we should use minimum wage to decide which businesses get to exist? Obviously, setting a reasonable minimum wage is important b/c of the power imbalance between employers and workers, but that's a completely separate issue.

Mosler: What I can do is 1st tell you what happens with my base case which includes JG policy where the JG wage functions as a minimum wage. Then I can tell you what happens if you switch policy from JG to unemployment and a legislated minimum wage.

Mosler: From there you could consider replacing the JG with unemployment like we do today. Personally I don't see how that might serve public purpose so I don't recommend it.

Comment: Creating guaranteed opportunities for meaningful, well-paid work that actually contributes to society would enable people to walk away from extractive industries.

Mosler: Why not do all that through normal public employment? That is, Congress just votes to hire people to do all those things at.

Comment: The Fed is not going to solve wealth and income inequality. They might help on a margin by heating the labor market, but the Fed is not your solution.

Mosler: Fed rate cuts to 0 have dramatically reduced interest payments that I call basic income for those with money and Gov securities trading fees/income are down. And deflationary 0 rates allow higher fiscal deficits=more income for lower income earners=(unintentionally). Good job Fed!.

Comment: Would you rather be Treasury secretary or Fed chair? Discuss. With the FF rate likely at 0 for years, Treasury?

Mosler: Fed's job becomes regulation. Tsy's job is to sign the paper money... ;)

Comment: What are you saying, Warren? Its one thing not to fear or fret about crises that can be remedied by a sufficiently large fiscal injection. It's quite another to call them "good".

Mosler: In the context of full employment fiscal balance policy and a JG, what's the downside of defaults?.

Comment: I enjoyed your essay very much @aaronwistar but strongly disagree w/ the claim that JG controls inflation via wage suppression. JG establishes a firm positive/living wage floor that's missing today. The status quo uses wage suppression based on mass unemployment for infl control.

Mosler: For me, it's about comparing JG to today's unemployment policies- It's the "I don't have to outrun the bear, I only have to outrun you" story.

Comment: I agree. Every "job guarantee" that does not reduce to people being allowed (and able) to create their own "jobs", "jobs" they believe to be valuable for themselves and the community, will end up in creating duties to fill BS-jobs that are bureaucratically administered.

Mosler: It's about using today's unemployment policy as the price anchor or adding a (voluntary) JG as a price anchor, leaving current unemployment benefits as they currently are.

Comment: Such a system may open a huge space for a possible abuse: the government will decide which jobs are needed and what are the "current rates ". Lets me know, which government will you entrust to make these decisions: Trump, Putin or Boris Johnson?.

Mosler: It's exactly the current system apart from the JG bit which would better transition the unemployed back to private sector employment.

Comment: Not as I understand it. The goal is to give decent paying jobs to everybody who wants them. Except they don’t really have to be jobs as everybody understands that word. So why don’t we just give people money. And let them figure out what they want to do. Same thing, right?.

Mosler: No, the goal of a JG is to promote the transition from unemployment to private sector employment for those remaining unemployed after the public sector has fully provisioned itself. That is, if Gov wants more workers it should hire them at current rates of pub sec pay/benefits.

Comment: “Any tax avoidance shows the tax system is too complicated. It needs to be simplified as per @wbmosler recommendation”.

Mosler: Eliminate all current tax liabilities, to be replaced by a Federal real estate tax, and a job guarantee of course...

Mosler: No, as there is never any reason that I know of to not sustain full employment via an employed buffer stock policy, aka a Job Guarantee. And employment/domestic output per se isn't inflationary and isn't a contributor to a negative shock.

Mosler: For openers, the Job Guarantee is meant to facilitate the transition from unemployment (workers not in the private sector) to private sector employment, which reduces the size of government and provides for a better price anchor than today's unemployment policy. Next question?

Mosler: For the record - Warren and I are on the public record (2001) as saying the continued issuance of public debt is unnecessary and should be discontinued. That certainly would change the CB-Treasury relationship.

Mosler: Yes, and for all practical purposes the US Treasury limiting new securities to 3 month bills does the trick within current institutional structure. Please forward to Janet, thanks, and remind Congress to mandate a permanent 0 rate policy and a JG to enhance price stability.

Comment: Remind me which sector public sector workers spend their money in again? Another example of how "my taxes pay for this" drives private sector workers to not only accept downward pressure on their own wages, but to sabotage the sector on the whole via lost income. Bizarre.

Mosler: Unemployed are also in the public sector, as tax liabilities/fiscal balance removed them from the private sector. So it's about both decent pay/full staffing and supportive unemployment benefits, and a JG to help transition unemployed back to private sector employment.

Comment: It also leaves us with a deeply inequitable society - and a crusted state sector. There is no way LVT could ever equitably deliver the tax revenue required by a state embracing MMT and wanting to control inflation. If you want to say goodbye to the NHS and more, do this.

Mosler: My proposed real estate tax along with proposals to cut off problematic income at source, permanent 0 rate policy, JG, narrow banking, etc. and sufficient aggregate demand via fiscal policy can do the trick. Institutional structure is causing the problems and can be modified. ;)

Mosler: I've also proposed to eliminate all tax incentives to not spend income, to slow the growth of massive pools of funds.

Comment: Sorry Warren, but I am utterly unconvinced and linking MMT to such implausible ideas would be a massive distraction.

Mosler: Yes, that's me, a massive distraction from regressive policy as espoused by all of the political parties... ;).

Comment: What should ECB do about the strong Euro? 1. Basic issue is that the Fed out-eased the ECB. 2. Which is putting appreciation pressure on Euro. 3. Lengthen maturity of QE purchases to counter that. 4. Don't cut the deposit rate => waste of time. 5. Don't talk about the Euro or EUR/$.

Mosler: Fund a job guarantee for member nations at 15 euro/hr and then increase the wage 2% per year.

Comment: I would resist the urge to rush into signing free trade agreements with other nations. Relying on a combination of tariffs and subsidies instead to protect and nurture U.K. industry. We live in an age where the weaknesses of the Free Trade era are evident. It’s time for Security.

Mosler: Security comes from full employment levels of aggregate demand and a JG with decent compensation, etc. leaving you free to optimize real terms of trade, mindful of national security concerns, of course. ;)

Comment: For MMT, a relevant constraint is the inflation (not budget) constraint AT full employment. There are 'inflationary' fiscal policies below full empl and could be used as justification for layoffs/low wages to tame inflation. We reject the NAIRU as a Monetary or Fiscal policy rule.

Mosler: If there are what is deemed to be an excess of workers in the JG pool and also inflation, it means the inflation is coming from something other than an excess of aggregate demand.

Comment: Real yields on U.S. 10-year debt turn the most negative since early September, at negative 1.05%, heading back down to the record low.

Mosler: Negative rates=a tax on those deposits=deflationary/contractionary. Positive rates=basic income for people who already have money=inflationary/expansionary but highly regressive, so not my first choice for public policy=I like permanent 0 rate policy+full employment fiscal+JG.