Mosler: The full employment response to unspent income by any sector is lower taxes or higher public spending!

Mosler: Trade Deficit= Foreign savers. Allow you to have/enjoy lower taxes/higher spending/higher budget deficit :)

Mosler: and always sustain full employment.

Comment: Our Gov't is probably thrilled USD is depreciating vs Yuan, even though they shouldn't be.

Mosler: There is no substitute for domestic full employment.

Comment: IMF Admits it Underestimated the Fiscal Multiplier.

Mosler: and worse, as there is no 'channel' for growth, full employment and prosperity, short term or long term.

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: In a monetary economy, Say's Law holds when deficit spending offsets desired savings, which just so happens to coincide with full employment.

Comment: Jim Grant: World Has Never Seen The likes of China’s Credit Frenzy.

Mosler: Just a shift in the composition of total deficit spending, now not nearly enough for full employment seems.

Mosler: That countercyclical tax structure ensures full employment isn't sustainable :(

Mosler: My full employment proposal for Gaza: Mandatory readings at MoslerEconomics.

Mosler: All debt is sustainable with a CB guarantee; no public debt is continuously sustainable at full employment levels without CB support.

Comment: Today @YvonneARoberts looks at what it means to create a dynamic creative 'good state'.

Mosler: Not to forget the deficit needs to be large enough to offset unspent income/sustain full employment!.

Comment: "Rising import competition from China reduced US employment growth by between 2.0 & 2.4 mln jobs between 1999 & 2011".

Mosler: A good thing! But wrong policy response! Taxes can be lower and/or spending higher to sustain full employment!.

Mosler: Even with just today's productivity, moving to full employment alone would result in unimagined prosperity! ;)

Comment: Mirowski "attacking macro is easy, but you really have to be willing to challenge micro, including agent based models".

Mosler: But macro alone is sufficient to sustain full employment.

Mosler: Re: Scotland- I'd sustain full employment with a new currency called the 'kilt' as a tease on those wondering what's behind it... ;)

Mosler: Opening the door for a US fiscal relaxation to sustain full employment, output, and investment.

Mosler: I call that combo the 'macro constraint' on sales, output, and employment we keep bumping up against.

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: TeaParty to GOP members: If you ran against amnesty, you must urgently defund it: NoAmnesty.

Mosler: Right, provided that for any given level of gov spending, you keep taxes low enough for full employment ;)

Comment: You should take a look at this. The Mosler Plan for Greece by @wbmosler.

Mosler: It was meant only to restore solvency, not output and employment which needs a much higher deficit.

Mosler: Yes, spending cuts and tax hikes in general slow sales and employment.

Mosler: Oil related? Tax cuts per se don't reduce employment.

Comment: But adult population projected to grow 10% by 2025. So: % of adults in rent-burdened households roughly flat?

Mosler: Employment as a % of population remains depressed from low demand- tax cut or spending hike needed to remove that drag.

Mosler: Ironically, the $10trillion Trump tax plan deficits, denounced by both sides, are what make it work to restore output and employment.

Comment: Fed doesn't have the tools to deal with asset price bubbles, acc to the Fed itself.

Mosler: Worse, employment and price stability aren't a function of interest rates, at least not the way they believe.

Comment: Seems to me this whole "debate" about nfa, equity reval, etc., is about Godley/Lavoie models, not mmt. I side with G/L there, btw.

Mosler: There has been no dispute with 'Soft Currency Economics' or with 'Full Employment and Price Stability' which specified NFA.

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: ECB could have done more and better. LTRO extension not needed. True open ended QE would have been much more effective.

Mosler: Neither helps with output, sales, employment, pricing, etc. ;) and QE removes interest income from the economy.

Comment: Do you think TPP is good for USA. To rest of the world?.

Mosler: Combined with full employment policy? ;)

Comment: Might a higher minimum wage lead to replacement of workers by machines? Absolutely.

Mosler: Which is a good thing that begs lower taxes or more public spending to keep demand at full employment levels.

Comment: Keynesians say govt spending in weak econ raises output & employment, multiplier larger than in normal econ + moderate price rise. So you agree or disagree with that view?.

Mosler: Why does it matter? Just do whatever it takes to sustain full employment!.

Comment: How'd you account the foreign sector, especially when running huge trade deficits that sucks out net-worth from HH?

Mosler: As always, make fiscal adjustments to sustain full employment levels of demand.

Mosler: Permanent elimination would increase sales, output, employment, and ultimately support the price level as well.

Comment: What Even Famous Mainstream Economists Miss About the Cambridge Capital Controversies.

Mosler: Yes and full employment is sustainable even without capital or growth.

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.

Comment: You need the federal government's dollars injected through deficit spending to create jobs.

Mosler: Deficit spending eases that restriction on net savings, allowing more spending and employment.

Comment: So-called Fraud #5 "trade deficit is an unsustainable imbalance". Very US-centric.

Mosler: Exchange Rate Policy and Full Employment.

Mosler: Resolve this: Fed says we're at full employment so hike rates, Trump says cut taxes and build infrastructure to put millions back to work.

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

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

Mosler: It slowed with the collapse in oil capex, as have all relevant stats including employment growth and lending growth.

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

Comment: Employment "is a basic human right," and we agree. thanks.

Mosler: Completely agree, but the case for full employment is best made without that statement. ;)

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.

Mosler: "I just want to say a quick word about what a good economy is because it's been so long since we've had a good economy. You've got to be at least as old as I am to remember it. In a good economy business competes for people. There is a shortage of people to work for business. Everybody wants to hire you. They'll train you, whatever it takes. They hire students before they get out of school. You can change jobs if you want to because other companies are always trying to hire you. That's the way the economy is supposed to be but that's all turned around. For one reason, which I'll keep coming back to, the budget deficit is too small. As soon as they started tightening up on budget deficits many years ago, we transformed from a good economy where the people were the most important thing to what I call this 'crime against humanity' that we have today......So what you do is you target full employment, because that's the kind of economy everybody wants to live in. And the right size deficit is whatever deficit corresponds to full employment..."-- Warren Mosler, from a talk in Chianciano, Italy, on January 11, 2014 entitled Oltre L'Euro: La Sinistra. La Crisi. L'Alternativ 1/1.

Comment: Modern money does not settle the global problem of unpayable debt. Sovereign money might work in a reboot, if there's social stability.

Mosler: The point is full employment is sustainable regardless of prior policy.

Comment: What is your definition of full employment?

Mosler: My comment "The point is full employment is sustainable regardless of prior policy." applies to most any definition of full employment.

Comment: Anyway, key issue is what happens to private sector liabilities: either redenominate (& new lira falls more) or not, but then you have NPLs!

Mosler: I proposed no redenomination. Full employment economy makes NPLs less of a concern.

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... ;)

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.

Comment: Please find me a single place where an MMT economist has “argued that countries should push for trade deficits.” I’d be shocked if such a thing exists. Our views on trade have been very nuanced.

Mosler: From 'Full Employment AND Price Stability' 1997, where I explained how a trade deficit provides for beneficial policy options: This understanding allows policy makers the option of taking advantage of the benefits of being a net importer. For example, an increase in net imports that results in the loss of private domestic employment will immediately result in an increase in the number of government $12,500 workers. This increases government spending (and the budget deficit) which may result in other industries hiring workers away from the government. If the pool of $12,500 ELR workers is deemed by the electorate to be too large, taxes can be cut or public spending increased until the number drops to the desired level. The public would associate higher trade deficits with an increasing standard of living, lower taxes, and other such benefits.

Mosler: Employment growth rate vs the same date 10 years prior. We've decelerated more and recovered far less in this latest cycle, as aggregate demand remains depressed by the damage done by the surplus years of the late 1990's.

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: A right to guaranteed public employment is a pro-free enterprise policy. Everyone who wishes can contribute to the labor market and can earn money to access market spending and saving.

Mosler: Yes, the imperative is to promote the transition from unemployment to private sector employment.

Comment: A #JobGuarantee is not about working for Tesco’s. It’s about working for Govt within your local community for a living wage on ur own schedule. It’s about workers security but also about social purpose & prosperity of the nation& no one could ever call it “money for nothing”.

Mosler: It's about promoting the transition from unemployment to private sector employment and at the same providing superior price stability.

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: Paul Davidson is 88 today- happy birthday! 20 years ago, he read 'Soft Currency Economics' and demanded I write 'Full Employment AND Price Stability', working with me continuously to get it right for publication in his journal. The rest is history! ;).

Mosler: You can sustain full employment and output, and a permanent 0 rate policy, but real terms of (external) trade can be problematic in any case.

Mosler: But said debt need be no worse with your own currency and less of an issue if you have your own currency and sustain higher levels of real domestic output?

Mosler: True. But the higher levels of domestic output from having your own currency work in your favor in support of your real wealth.

Mosler: And with higher domestic gdp growth, and no new external debt being added, the external debt to gdp ratio is continuously declining.

Mosler: It doesn't follow, it leads. I agree that if you are already at full employment, etc. you don't need to go to your own currency. So the context is you made the change to your own currency to increase GDP growth, etc.

Mosler: I'm thinking of Greece going to Drachma, sustaining domestic full employment output levels, and then facing currency depreciation. GDP would be maybe 25% higher and growing. Or Italy,for another example.

Mosler: Are they using fiscal to sustain domestic output at full employment levels? Their high policy rate is basic income for those who already have "money" so created distributional issues. Are govt payments indexed to "inflation"? How's banking regulation and supervision?

Mosler: My point remains that Scotland optimizes real wealth by sustaining full employment and if it isn't allowed to do this with sterling, it can instead do it with its own currency, regardless of sterling debt and regardless of whether or not the new currency some day depreciates.

Mosler: Depends on how you define constrained but I do agree Turkey's fx debt reduces their real terms of trade potential vs. that of the UK. But both can quickly get to full employment and a 0 rate policy.

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.

Mosler: Turkey's fx debt is about 50% of GDP which is high. I'm saying it would be a larger problem if they didn't have their own currency, because they wouldn't be able to sustain full employment. But they aren't doing that now even though they could.

Mosler: So in sum Turkey's fx depreciation is not coming from attempts to sustain full employment but from issues in the banking system combined with the 25% state policy rate.

Mosler: Are they at full employment?.

Mosler: Not anywhere near full employment. So not a case of high aggregate demand.

Comment: Fifty-two percent of American support a federal #JobGuarantee, even more so if those jobs help mitigate and adapt to #ClimateChange. 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.

Comment: Wouldnt it risk seeing capital flight as investors prefer to invest in other countries with a higher interest rate?

Mosler: Higher rates of employment and consumer demand tend to attract investment. And 'capital flight' as defined is only applicable to fixed exchange rate regimes.

Comment: I get the problem with borrowing in a foreign currency, but how much capital equipment can you buy with Turkish lira?

Mosler: 1. A lot 2. Any nation can sustain domestic full employment without imports of capital goods, and Turkey has very high reported unemployment.

Comment: To clarify - I think we all agree JG politics are inseparable from the financing framework. We all want to avoid the problems Kalecki highlighted. If we make the JG dependent on taxes, aren't we...giving the rich back-door capital strike leverage over the transitional demand?

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: 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: No one has produced a careful analysis to work out how much of the net, new spending might need to be offset.

Mosler: Too much net spending = only a one time increase in prices that can readily be reversed, without a drop in employment or output. It does not 'trigger hyperinflation' or anything of the sort. But too little = unemployment and lost output. So what are we waiting for??? ;)

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.

Comment: So what are Central banks doing playing with short term rates and why does hiking rates correlate so strongly with lower demand and recession?

Mosler: Central banks have it backwards, and other things correlate a lot better than rates which can be working pro cyclically. Read the CB literature on how little evidence there is of causation running from higher rates to higher output, employment, and inflation.

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.

Comment: Criticism of MMT is that it doesn’t apply to developing countries or those with non-reserve currency status as Frances mentions. These points have been addressed in the academic literature and at the 2017 MMT Conference by its core proponents: MMT and the Job Guarantee in Developing Countries.

Mosler: Yes, currency fluctuation doesn't per se alter real wealth. It does have serious distributional consequences, best dealt with by adjusting internal institutional structure while sustaining domestic full employment.

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: "But what would JG workers do?".

Mosler: Transition to private sector employment.

Comment: Every single one of these Fed chairs endorsed and perpetuated the NAIRU framework which has resulted in systematic undershooting of full employment, at real cost to millions of people. But sure, tell me more about the risks of an independent Fed.

Mosler: However, since they've had the interest rate thing backwards, so the higher than otherwise rates in fact helped support employment... ;)

Comment: Agreed the so called "bleeding hearts" suddenly care more about "prices" rather then people having a productive job to shelter, feed, cloth, and educate their family with dignity. Hard to pay less for something if you dont have a job!

Mosler: Trade deficit= a productivity increase= fiscal space to lower taxes or increase public services to sustain full employment levels of aggregate demand. Imports are real benefits, exports are real costs- the problem is the policy response that turns a good thing into a bad thing.

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: If you believe that Congress is largely under the influence of big money, then you are naive to think that you're going to get the tax increases you "need" to save the planet in time. I'm just showing that there's another way to get at least part of the way there.

Mosler: Yes, and note that at 'full employment', real govt. spending 'crowds out' private sector real spending, via 'one time' increases in prices, etc

Comment: Well if you listened to them for hours, you should understand why a FJG is superior to a UBI. There are lots of jobs that could be created to serve the public purpose.

Mosler: FJG better promotes the transition from unemployment to private sector employment than UBI.

Comment: And we need a Job Guarantee why exactly?3.7% unemployment $1 trillion deficits7.2 million Jobs with only 6 million looking for work. JOLTS Wages rising in Real Terms most at the bottom end. And still importing $600 billion annually. Reality check!.

Mosler: To have a mechanism in place that promotes the transition from unemployment to private sector employment. Please read my 7DIF book thanks.

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: The goal is to replace today's buffer stock (unemployement) with a better one (job guarantee).

Mosler: The goal is to promote the transition from unemployment to private sector employment.

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: 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: Thank you and I agree. The Job Guarantee aims to fit "jobs to people" befitting their needs and skills. One of the goals is to support people with disabilities and provide suitable employment opportunities for those who would like to work.

Mosler: I've also proposed that it serves public purpose to give disabled people priority for regular public sector employment, as it would increase total real output for the nation.

Comment: My main objection of a job guarantee is that work sucks.

Mosler: It's meant to promote the transition from unemployment to private sector employment because employers prefer to hire people already working.

Comment: But that doesn't change the fact that without addressing international competitiveness, a country will be constrained to follow lower growth rate vs if it imported less/exporting more.

Mosler: The real limit to domestic output is the number of available domestic workers and their productivity. With floating fx, aggregate demand constraints are about fiscal balance/public policy which can be continuously adjusted to sustain full employment, etc.

Comment: What about balance of payments constraints?

Mosler: Thanks. There is never a case where trade issues would force the abandonment of full employment policy/optimizing domestic output of real wealth.

Comment: Did I ever once say that Balance of Payments issues negate what MMT says? I'm just saying that they exist.

Mosler: In any case, full employment policy at all times is fundamental for optimizing real wealth.

Comment: Here's the issue. Free trade and an increasing reliance on imports is a demand drain for a domestic economy. This destroys jobs and growth.

Mosler: Yes, and said demand drains are good things that create fiscal space for lower taxes or increased public services to sustain full employment and increased personal income.

Comment: But the issue with Free trade is, is if nothing is done about competitiveness, then because of things like increasing returns to scale, cumulative causation etc, imbalances will not only persist, they will indefinitely expand.

Mosler: It always comes down to optimizing domestic output and real terms of trade= full employment and enhancing productivity.

Comment: Yeah of course, but there's more to economic policy than full employment policy. Economic development is essential too.

Mosler: Implying full employment policy necessarily restricts development?

Comment: The point of the job guarantee is not about efficiency. It’s about guaranteeing people economic participation that provides them with an income. There’s much to do that we are neglecting. But Even if that job was digging holes and filling them up again. You’d still see a benefit.

Comment: That's a very narrow view of the JG policy. The govt can create all kinds of jobs from most sophisticated to the jobs requiring least skills. JG is always equated to digging holes by the neoliberals. Even a partial JG policy in India has created an environmentally sustainable infra.

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

Comment: The point of the job guarantee is not about efficiency. It’s about guaranteeing people economic participation that provides them with an income. There’s much to do that we are neglecting. But Even if that job was digging holes and filling them up again. You’d still see a benefit.

Mosler: And it would still promote the transition from unemployment to private sector employment, thereby providing a superior price anchor/more price stability than unemployment.

Comment: Balance of Payments issues also have economic causes though, as continuing build up of (private) debt can cause financial crises, default, & reversal of capital flows leading to lower growth. So a country running a constantly expanding CAD will not have a sustainable growth rate.

Mosler: Rising unemployment is always a matter of domestic policy response, and full employment policy per se doesn't work against productivity increases.

Mosler: Recent evidence shows current unemployment benefits have not been a disincentive to employment.

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.

Mosler: So the base case for analysis is the gov imposing tax liabilities, then hiring those the tax liability caused to show up for gov employment.

Comment: That all falls under "saving desires" as highlighted in my 7dif book and numerous other writings at.

Mosler: Full employment optimizes domestic output and real wealth.

Comment: To argue that MMT could be policy-relevant for developing countries does not imply that policy recommendations for developed countries would apply to them fully and evenly. Owing to the specific constraints faced by developing countries.. more modest.

Mosler: Any nation with taxing authority can sustain domestic full employment.

Comment: Until they recognize they have the interest rate thing backwards, they will have what they think is good reason to avoid public debt.

Mosler: Mainstream economists say if gov debt gets too high while sustaining full employment, hiking rates to fight inflation makes it worse due to higher gov interest payments, and I agree, only adding that we are already at that point where rate hikes cause inflation and cuts slow it.

Comment: The USPS is the LARGEST employer of Veterans in US. USPS also gives special hiring consideration for Veterans with disabilities, especially if hurt in a war zone. What are social and economic costs of their unemployment?.

Mosler: I've proposed (as a point of logic) the disabled and veterans get priority for normal public employment in general as that optimizes total output/standard of living of any full employment economy.

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: Modern Monetary Theory logically proposes national Job Guarantee Schemes to address everyone’s normal needs and protect the environment.

Mosler: To facilitate the transition from unemployment to private sector employment, and not to hire people to do things that the government can hire in the 'normal' way.

Comment: It is but shows no theory is a universal panacea for all nations. US resource rich & could prob get away without exporting or importing. NZ needs to export surplus to be able to import things of modern economy can't produce itself. NZ's problem is local food sold at export prices.

Mosler: Just saying optimizing real wealth is about sustaining full employment and optimizing real terms of trade.

Comment: Let’s have a discussion about whether #MMT can add any value to analysis of the South African economy. I’d appreciate your perspectives on this.

Mosler: SA can immediately move to sustained full employment and optimized real terms of trade and thereby optimize real wealth.

Comment: That’s very easily avoided by buying property and other non-cash wealth. All wealth above a certain level should be subject to tax, what the threshold and the level should be is a matter for debate.

Mosler: And I propose eliminating/disarming said undesirable income at source with the likes of a permanent 0 rate policy, full employment policy, 60/40 political donation policy, efficiency mandates, selective rationing policies, free healthcare and education, etc. etc.

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: We see the Fed forecasting core PCE inflation at 1.9% in 2023 in tomorrow's forecast. Pretty shocking really. We don't get back to 2% even on such a long horizon. If you think inflation will rise faster, historically that's only happened with spiking oil prices. Not happening....

Mosler: A permanent 0 rate policy is a deflationary bias that promotes low inflation and low demand, thereby requiring larger fiscal deficits to support full employment. And that's just one reason why I propose 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: We have designed one and would be discussing it intensively for 2021 implementation in Medan city, Indonesia. Description and infographic coming up. Requesting your, and all other mmt experts' inputs. :)

Mosler: I would suggest measuring success by how many people it transitions from unemployment to private sector employment.

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: 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: 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: Finally, should we have a fiscal target and if so, what should it be? For this we need a view on g - r. About two thirds of the last 150 years it has been positive, meaning you can run a primary deficit (deficit excluding interest) and still have stable debt.

Comment: Am I missing something? could this work?

Mosler: How about whatever it takes to sustain full employment?

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?

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: My deviation from MMT (and conventional thinking) is that inflation is irrelevant. A different discussion for another time.

Mosler: Inflation is not an economic problem, but it is a political problem due to serious distributional issues (which fortunately can be addressed while sustaining full employment and output).

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: Credit to Jim Bullard for reviving this view under the Neo-Fisherian argument. Also credit to Jim Bullard for failing to advance anything controversial.

Mosler: So, not that it actually matters, a prime mainstream argument about increasing net (deficit) spending to sustain full employment, for example, is 'we're ok as long as the Fed keeps rates low' which becomes moot when it's understood that raising rates in fact promotes inflation.

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.