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Let My People Work!

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  • Strongly Liberal Democrat
    Dallas, TX
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    If Republicans are so sure that unemployed people don't want to work, why don't they test that theory with a federally funded, 'rules based,' 'transitional,' and completely 'voluntary' Job Guarantee (JG) for every American able and willing to work? If the Republicans are right, then it's no problem. Nobody shows up. And people like me will look stupid. But what the Republicans don't get, and why they are on the wrong side of their own stated ideology, is that government CREATES involuntary unemployment through OVERTAXATION per size of government. "For a given size government and a given size credit expansion, there's a rate of taxation that corresponds to full employment"- Warren Mosler. And the best way to target the right amount of government net-spending to make sure we are at full employment, w/o sacrificing price stability, is to let the MARKET DECIDE. A completely voluntary Job Guarantee doesn't work by 'priming the pump' to create jobs; it directly creates jobs which 'primes the pump'! People want to work! That's what all the surveys show! They would rather have a job than a handout. They want to 'earn their way'! Let them! There are more things to do in the public sector/non-profit charity sector than people to do them. And if you're concerned about the growth of gov't here, the best way to keep the JG pool minimized is to keep normal fiscal policy 'loose' enough to keep the economy at a low level of involuntary unemployment; and since you don't want more 'normal' government spending to do so, you're gonna need tax cuts on the demand side.

    If Republicans are adamantly against a JG, fine, then stop 'bleeding off' the consumer dollars in the economy with regressive tax hikes and government spending cuts! In the name of all that is holy, wake up and realize that Capitalism 'runs on' sales!

    Monetary policy obviously doesn't work to restore aggregate demand! QE is a tax. The FED makes $90 billion annually in profits turned over to the U.S. Treasury. That's INCOME LEAVING THE PRIVATE SECTOR! And the lower interest rates hurts savers more than they help borrowers. These policies are RESTRICTIVE. Meanwhile, the distortive 'wealth effects' of the effective 'pump priming' of the stock market only accelerates more inequality, as it's tail wagging the dog. The transmission of the 'wealth-effect' to real world aggregate demand is at best highly delayed and grossly distorted. Yes, the private sector credit expansion can 'drive up' aggregate demand on its own, and get us to full employment and keep us there for a while; but this typically requires a massive, unsustainable credit expansion, featuring a massively fraudulent 'leg.' The credit expansion can work on the way up to get us to/near full employment; but once debt-service gets too high against income gains falling lopsidedly upward, and with more tax revenue flowing endogenously into the government's accounts, with the government's deficit falling below foreign sector savings, it all comes crashing down in Ponzi. And then you need a fiscal adjustment or your whole economy comes crashing down. But when you've got counterproductive monetary policy that's 'driving' the 'wealth effect,' by effectively taxing interest incomes to promote investment in the stock market, putting the FED on the same side of the fiscal balance sheet of the deficit cutting government, the 'wealth effects' are highly unlikely to 'trickle-down' to a credit expansion capable of lifting the private sector out of its depressed state of aggregate demand and get us to full employment. This is due to the 'headwinds' of reduced net-interest incomes; raging non-government savings demands; ongoing uncertainty regarding gov't budget cuts, tax increases, and interest rate increases, etc.; and all alongside less credit-worthy borrowers and tighter lending standards in the wake of the lending fraud that brought down the financial sector, 2007-2008.

    So here's an idea for the Republicans: How 'bout we let real markets for real goods and services work! And, again, if you don't want government to be a 'buyer' in the private sector 'marketplace,' that means we are going to need massive tax cuts, much bigger than the spending cuts. The reason is that some tax cuts will end up as savings, and government spending is all spent by definition. So Republicans should be adamantly demanding much lower taxes for the 99%. For the sized govt we have, we are OVERTAXED! And it will only get worse with more spending cuts, as the private credit expansion doesn't seem capable of 'driving' us out of this mess, given all the 'headwinds' it must overcome. For crying out loud, the Tea in Tea Party stands for Taxed Enough Already!


    The true 'conservatives' are the 'progressive-populists' that understand how our monetary system actually works.