April 21 Federal Job Guarantee & Modern Money Theory

 This is the handout notes for a presentation made  by the Modern Money Policy group in Salem, MA  April 21, 2018

Presentation Overview

  • We will be introducing two economic concepts:
    • A Federal Job Guarantee (FJG)
    • Modern Money Theory (MMT)
  • FJG:
    • The larger portion of the presentation.
    • What it is, how it works, and why it is necessary.
  • MMT:
    • Modern Money Theory describes the funding mechanism that makes the Federal Job Guarantee possible.
    • Understanding MMT is essential when advocating for and implementing progressive policies.
    • It provides the answer to the inevitable “How are you going to pay for it?” question.

Questions Will be Answered After the Presentation

 

 

!

 

Federal Job Guarantee

Voluntary – Nobody is Required to Apply

  • Anyone without a job can apply and get a job full time or part time.
  • Jobs will be real, productive jobs.
  • The program is federally financed, locally run.

All FJG Jobs Are Paid $15/Hour

  • Every job has full benefits
    • Healthcare
    • Family leave
    • Retirement savings
    • Vacation
    • Childcare
  • Examples of FJG jobs:
    • In abandoned or areas of high industrial pollution, jobs can be created to restore the natural environment.
    • Setup and run public gardens in urban food “deserts.”
    • Create, protect, and expand networks of public trails.
    • Create public art including performances.
    • Assist public schools to help teachers and lessen their work loads.

▪ This is just one example where people can use their existing skills to learn about other careers.

 

  • Jobs that are not part of the FJG:
    • Private sector employers, in general, cannot submit requests for FJG employees.
    • Public sector jobs being performed by competitively hired persons cannot be replaced by FJG employees.

▪ Some FJG jobs may prove themselves as critical and in that case the jobs will move into the job market.

  • Work that does not produce something of value to the local community.

The FJG Sets the Minimum Wage

  • Current proposals are to start at $15 / hour with 100% paid for benefits.
  • Creates a competitive market for labor.
  • Universal Basic Income (UBI) does not enhance labor’s market position or add to the commonwealth.
  • Employers must meet or beat the FJG package.

All Economies Are Cyclical—An FJG Can Prevent a Downturn from Becoming a Serious Recession

  • Once the mechanism is in place to provide jobs, the impact of jobs lost is minimized.
  • Benefits are preserved.
  • Can be used to acquire new skills or keep existing skills sharp.
  • Unemployed people are at a disadvantage when private sector jobs return.

▪ Private sector employers tend to want to hire people who are already employed in another job over someone who is unemployed.

Lessens the Negative Social Impact of Joblessness

  • Universal Basic Income (UBI) cannot, by definition, do this.
  • Individuals are less likely to commit crimes when jobs are readily available.
  • Suicide risks increase among the unemployed.
  • Social benefits of working.
  • Does not force unemployed to take a job – respects individual preferences.

The FJG Serves as an Auto Pilot to Control Inflation

  • The Fed has a mandate to maintain unemployment at the lowest level that does not generate inflation.
  • With an FJG, employment is always at its highest level.
  • By adjusting the FJG base wage periodically based on productivity and actual living costs, it will not generate inflation.
  • Each time the wage is adjusted up, a small short one-time jump in prices may occur. Inflation is a steady increase in prices.

Anyone Can Still Use All the Existing Supports that Currently Exist

  • Food stamps, unemployment compensation, housing, and heating assistance, for example.
  • Most of those on the FJG may not qualify for some supports, but depending on their personal circumstances they may.
  • It is expected that shortly after a FJG is fully implemented, expenditures on safety net programs at all levels of government will begin to lessen.
  • There are no income requirements to enter the FJG program, anyone can apply.

The FJG is Fully Funded by the Federal Government, but is Managed at the Local Level

  • Current unemployment centers can become a full service employment center.
  • When someone becomes unemployed, they go to their local employment center where they can select a FJG that suits their skills.

 

  • Local charities, government agencies and non-profits can all submit lists of jobs that the FJG can fill:
    • The lists are reviewed, and then sent for approval to make sure the jobs are meaningful and do not replace existing jobs.
    • Jobs will be local to the workers and will allow them to participate and help generate private sector jobs.
    • Studies have shown that for most people the paycheck is not the primary reason for seeking a job. The social aspects and feeling of self-worth are rated higher.
    • Providing jobs for anyone that wants one is the primary purpose of the FJG. There are multiple incidental societal advantages:

▪ Less crime

▪ Less drug addiction

▪ Less suicides

 

FJG Impact on the Federal Budget

  • As noted, one impact is that existing programs for assisting unemployed will continue but will see less usage. Those funds can be redirected to a FJG program.
  • State and local programs will also have less “customers,” freeing up funds for their needs.
  • Since FJG workers will protect a down economy from a major recession, private sector jobs will likely return quicker, reducing the spending on the FJG program.
  • The FJG must be fully federally funded. States do not have the capacity during downturns to increase funding, while the federal government is not restricted at any time from increasing funding as needed.

Modern Money Theory

MMT alters the purpose of a federal budget from restricting expenditures to making priorities.

It raises the ceiling of what can be done, allowing moral choices to drive the process and sends austerity to the dustbin of history

 

 

 

Modern Money Theory

Gold Standard

  • Use ended in the US in 1971; the rest of the world followed shortly thereafter.
  • US began issuing Fiat money.
  • The US is Monetarily sovereign.

Describing MMT – Modern Money Theory

  • MMT is a description of how fiscal policy operates without a Gold Standard.
  • It is NOT Modern – It is NOT a Theory.
  • Federal government is the issuer or creator of all US Currency whenever it spends.
  • Everyone else including all other levels of government, banks, people, businesses and foreign entities are users.
  • Provides a job guarantee to smooth economic swings.

Taxes

  • Primary purpose is to create value for the US dollar.
  • Other functions:
  • Discourages social negatives
  • Reduce Income inequality
  • Controls the $$ supply
  • Slows inflation

 

 

Constraints on Money Creation

  • Full Employment
  • Resources such as land, raw materials, energy, knowledge, and infrastructure are unable to meet demand.

MMT and Mainstream Economists

  • US cannot go broke:
  • Greenspan
  • Krugman
  • Stiglitz

MMT Heterodox Economists

  • Leading Advocates:
  • Stephanie Kelton
  • Warren Mosler
  • William Mitchell
  • William Black
  • D. Alt
  • James Galbraith
  • Randall Wray

MMT and the Progressive agenda

  • Why Progressives should embrace MMT:
  • Eliminates the “how do we pay for it” argument
  • MMT is agnostic when it comes to political philosophy
  • Provides a common economic platform and disrupts stale mainstream thought.

Future Plans for MMT Advocates

  • Ongoing meetings to introduce activists to MMT and related policy initiatives.
  • Modern Money Policy – discussion groups.

 Questions?

 

 

Contact Me:

  • Messenger on Facebook – Brad Sandler
  • DM on Twitter – Sandler_Brad
  • Email – sandler@comcast.net
  • Facebook Group – Modern Money Policy

 

 

 

 

 

Resources for More Information

http://neweconomicperspectives.org

The go to place for all matters MMT. Archive of articles and blogs by numerous MMT proponents.

https://www.youtube.com/watch?v=CLrOKbhEhdY A video detailing what MMT is NOT

https://www.youtube.com/watch?v=d57M6ATPZIE Stephanie Kelton’s Angry Birds Presentation

https://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

A free PDF version of Warren Mosler’s 7 Deadly Innocent Frauds of Economic Policy (When you open the link, you may need to scroll down to see the text.)

https://www.pavlina-tcherneva.net/job-guarantee

A collection of videos and writings by Paulina Tcherneva on the Federal Job Guarantee

https://modernmoneybasics.com/facts/

An overview topic by topic on all the major ideas associated with MMT

http://www.modern moneynetwork.org

Brings accurate and accessible knowledge of monetary and financial systems to the broader public.


 

elliswinningham.net

Always informative, Winningham uses simple language to make learning MMT easy.

Real Progressives Group on Facebook

Multiple FB groups touching on all facets of MMT at all levels of knowledge

https://www.facebook.com/groups/MMTforRP/ Modern Monetary Theory for Real Progressives

Modern Money Policy on Facebook

The Eastern MA based group doing this presentation

http://www.levyinstitute.org/pubs/pn_18_2.pdf

The written source of the proposal discussed in the presentation

https://www.pavlina-tcherneva.net/job-guarantee-faq

Recently created online FAQ put together by one of the authors of the above FJG proposal

New Hampshire Modern Money Group (MMT) on Facebook

A group from our Northern neighbor

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It’s One, Two, Three, What are we Bombing For?

I am sure I am just having a brain fart. You know when the thinking process gets muddled, because you are certain that something don’t add up.

Take this whole bombing Syria thing. Here is one thing that don’t add up. And I tell you this aware that a horrible sweet smell may suddenly overcome my brain. Just assume, for a moment, that Assad actually bombed his own citizens with chemical weapons. And take that a step further, and assume he did that just prior to regaining full political control over his country. So, in order to make sure he doesn’t do that anymore, we bomb his citizens. Does that mean he intentionally bombed his own citizens to egg on the US into bombing more of his citizens? Are we just Assad’s patsy? Fart!!!

Or, perhaps the US is lying and we have no clue who used chemical weapons, but because Regime Change our “leaders” decide to retaliate against Assad, guilty or not, possibly leaving the true guilty party unpunished, and in doing so we kill more Syrians? In other words we get rid of the horrible, evil, Assad by being more evil than him. Fart!!!

Think of all the fun you can have making up justifications for bombing a country to show the world you can defeat any bad guy, or the USA will give you a dose of American deaf, dumb, and blind punishment. oh no…. Fart!!!

(Only try this in a room that has open windows)

Post Script:  This was originally posted on FB. I need to add a couple of disclaimers.  The scenarios are not necessarily my viewpoint of what happened as far as to who used chemical weapons or if they were used at all.  I do believe that some sort of bombing occurred, and that it is highly unlikely that Assad would have even done that.

What Does the Future Look Like?

Are you a pessimist, convinced we are heading on a one way trip to a world of serfs and princes? The place we read about in fantasy novels and fairy tales. A place where there are all these nameless people marching into war blindly following whomever happens to rule from their walled castle into battle. And uncounted nameless along with a few of the princes as well, die horrible gut wrenching deaths. The era of serfs and lords, when feudalism was the primary micro economic model while macro economics formed into a nascent version of capitalism called mercantilism.

Or maybe its a technology drenched world run by oligarchies who place panopticons everywhere. So omnipresent that they are even watching each other. It a bleached and barren dystopian world where the oligarchy knows everything about everyone, and punishment for not following the rules is swift and sure. But the rules are always changing and everyone only has time to keep up with the rules. Its a world where socialism defines why individuals not in the oligarchy cannot have, because it all has to be divided up equally, except for the ruling class oligarchs. One could look at it through a lens of our current era and declare it a communist society where the world is divided into two camps. This is what could happen if we adopt socialism without a plan for managing the macro economy. It becomes the ultimate egalitarian society that has lost all the flavors of individuality, but everyone is fed and everyone has clothing and a place to sleep.

The first, of course, is the exaggerated outcome of letting Free Market Capitalism to continue  along its current path. The latter is what happens when the entire world is handed over to Socialism and allowed to go along its path to Communism. I have heard Socialists speak of disdain for any macro economic models, under the argument that Capitalism requires macro, therefore Socialism must reject it.

The future does not have to be one evil or the other.  There is a future where everyone can have their needs met, food, clothing and shelter. We can build a world with these things by providing to everyone the same advantages that the princes and the oligarchs have. Education and training for everyone, the chance to paint your castle no matter how small or large, whatever color you want. But that won’t happen in a world dominated by the two opposite forces of conformity.  We were all born with a unique set of genes, and grew up with unique experiences, we are all different.

By recognizing that the only way to attain universal social equality requires economic equality. It is obvious that neither Free Market Capitalism or Socialism will bring that about. But an economy that relegates Socialism to assure that everyone gets what they need and hands the keys to Free Enterprise Capitalism for supplying what people want can create that world. One where Socialism is contained by limiting it to what it does best, protecting people and letting capitalism do what it does best by emphasizing competition. And there is only one macro economic model that allows both ideologies to work happily side by side. That is one that uses a sovereign fiat currency, where the government is the sole issuer of that currency and collects all taxes, fees, tariffs and fines as well as pays all it’s bills in that currency.

But that is not all. Those nations also need to recognize that their economy is only limited by its production capacity. That is the key to creating a nation that provides all the needs of all the people. A nation that also makes space for individual achievement and comfort. Some call this Modern Money Theory, I call it Modern Money Policy.

Now, go learn it.

Modern Money Policy

For a few years now, I have written from time to time about a subject called Modern Money Theory (MMT). Which is an objective, apolitical approach to describing macro economics. In particular, I have written about what the approach means in countries like the US, Russia, The UK, China, and Japan. Those countries named and many others, all have a currency that are called sovereign, fiat currencies. Issued solely by the government and used to make all payments, any payments due to these governments can only be made in their own currency. While there are other approaches for a nation to take regarding their currency, and MMT in each approach defines the limits of spending and taxation, issuing currency or collecting payments, I have only concerned myself with US and the limits MMT defines for a nation with a sovereign fiat currency.

The problem is that despite the explanations of how the US can benefit by understanding MMT from what myself and thousands of others have been explaining, many persons still have not even heard of MMT. Others dismiss it as foolishness or even a psyop.  Meanwhile, those of us familiar with MMT keep plugging away.  We are not all economists, but some are. Not all MMT economists are liberals, but most are.  Some MMT economists are even gaining fame and beginning to achieve recognition for their work.

I am not an economist, just one of thousands that have taken the time and spent the energy to learn about MMT and try to explain it to others.  The reason is simple, the awareness of MMT and it’s explanations of how the macro economy operates is gaining in academic acceptance. MMT economists have over the past few years have been able to reach out and be heard by many politicians and economic policy makers. Perhaps, many have not accepted the descriptions, but some do but are concerned the general public will not accept it.

So, in order to help these leaders understand the policy possibilities of exploiting the principles of MMT to spend public money for policy that serves a public purpose a new Facebook group has been formed; Modern Money Policy.

The focus will be on what can be done in the public purpose arena and by deepening the understanding of how MMT can be used to create a more stable micro economy, the economy where we all live.

Many are already being asked to join, but don’t wait for invite – join us.

It’s All In The Way That You Say It

The right wing in America has taken over our political language. Nearly all international politics are framed in terms of the neo-con agenda, nearly all economic discussion is framed in terms of the neo-liberal agenda. Don’t be fooled by the use of the word “liberal”; the neo-lib’s economics are a conservative cornerstone.

One of the most abused term by most Liberals who have adopted neo-lib economics is the phrase “taxpayer’s money”. How many charts have we seen saying how much the average taxpayer pays to support our war machine vs. items such as food stamps? But the use of the term “taxpayer money” does not truly convey an average, instead it implies that each dollar individuals pay in taxes is like a voting share of stock in the corporation called The United States of America. Those that are in the top 5% get a bigger say because they pay significantly more than the lower-income 95%. And what about those that directly pay no federal income taxes, are their needs diminished because they “contribute” less? While you may think my assertions here are not what is meant when you use the term “taxpayer money”, in practice that is what is happening.

So, lets all adopt the phrase “Public money”. A chart that says only 2% public money is spent on welfare such as food stamps, implies that federal spending is not a corporate stock vote, but instead a reflection of our values. Did not Rabbi Jesus ask that we not forget the poor among us? Is the US a corporation or a nation by and for the people? Over time, slight alterations in framing debates, change the actual out comes; try public money on for size, you might find it a comfortable fit.

Had Enough Yet?

The Second Amendment to the Constitution of the United States.

A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.

Clause 1 – A well regulated militia

This clause introduces the right for the existence of well regulated militias. It be hard to argue against the words “well regulated” means anything other than subject to laws and regulations. It clearly also means that militias that are formed outside of the laws and regulations created for militias are not covered by this amendment.

Clause 2 – being necessary to the security of a free state

This clarifies who is responsible for creating the militia and why. The states will create these militias, not the federal government. The reason was to allow states to keep their citizens safe. The underlying reason for that was that post revolutionary America was in turmoil, with numerous rebellions popping up all across the country. The Articles of Confederation did not provide for state militias, and so the federal government was responsible for putting down the rebellions. Additionally, in the chaos many slaves in the South were escaping to the North. A state level militia would allow states to enforce their slavery laws.

Clause 3 – the right of the people to keep and bear arms

Here we have the first clause of this amendment that provides the right to own and carry weapons. If it had been stated first then it would not subject to the limitations in the first two clauses. The people here are members of the citizen’s militia, regulated by the state to secure the safety of their fellow citizens.

Clause 4 – shall not be infringed

The kicker, the clause most used to emphasize that the government is powerless to regulate the ownership of weapons. But, by looking at the entire amendment, which is one sentence consisting of four clauses, each clarifying the previous clause. But what the entire sentence means is that State regulated militias manned by citizen/soldiers shall be allowed to carry weapons, and the federal government cannot outlaw state regulated militias.

Its time for the US to move into the 21st century and restrict with sensible legislation that reduces the number of guns owned. If you participated in the orgy of thoughts and prayers for the kids and teachers who died the other day, then remember that your prayers are only as good as your actions. If you don’t act, then your prayers are not answered.

There is fear in the air, and blame all around

I’m going to start this rant, and it is most certainly a rant, talking a little bit about former President Obama. And Israel. Near the end of Obama’s timer in office he allowed a UN vote to proceed that seriously reprimanded Israel for their ongoing actions of apartheid and prejudice against the Palestinian people. It was a typical “doing the right thing” but too little, too late. And now we are seeing the outcome of the decades long US propensity to turn a blind eye to Israel’s bad behavior. Israel is on the brink of war with both Syria and Iran, the US remains silent while Russia pleads publicly for restraint from all sides.
Meanwhile the US Progressives – real Progressives, not Democrats, as a party they are not Progressive – pile on the condemnations of Israel. And I would fully concur, but not when so many don’t stop with expressing their dismay with the state of Israel, they extend it to Jews. Often they bury it under the term Zionism. A word that merely means that Zionist Jews claim the land of Israel as their ancestral home. PERIOD. FULL STOP. Just as some Christians and some Muslims as well as others have twisted a tenet of their religion to justify horrible behavior, the same is true of Jews and Zionism.
But even that is not the reason behind this rant. Over the past 6 months I have seen posted almost weekly on FB a list of prominent Americans that are identified as having dual citizenship in the US and Israel. The post usually goes on to point out that these people cannot be trusted due to their dual citizenship. Amazingly, about 99% of the list are Jewish politicians. The implication is clear, and to any Jew, terrifying. Singling out people as enemies of the nation they are serving truly does echo the tactics of Nazis. And remember, the people posting this are supposedly open-minded Progressives. They stand up and salute BLM (so do I); they cheer as the LGBTQ community steps closer to equality (I cheer as well); they are proud of the #MeToo women (I am too); they get mad that the Dems don’t put it on the line for the Dreamers (I do too); they condemn Jews and I get mad.
But let me get back to the list. It is not true. Those people do not have dual citizenship. They are Jewish, and the state of Israel has what is called the Law of Return. Any Jew from anywhere can go to Israel and claim citizenship, and just like the small print on any special offer – some restrictions may apply. Numerous times I have tried to explain why the writers of the list are saying that every Jew in Congress has dual citizenship. It is because of the Law of Return. And, by perpetuating this myth over and over. More than just myself point out why this is not true, and I have yet to read once, even once. “Sorry I didn’t know that”
I find that behavior to happen so consistently that I have to regretfully inform anyone that believes such anti-semitic crap to unfriend me. And believe me, this list is only one example. Please just because Israel is a Jewish nation and most Jews support it’s right to exist does not mean we all support the way it exists. And I can say the same for the US, and that is something Progressives – real ones – would agree with me.