Read it at Interfluidity
winterspeak writes:
Aaah, the job guarantee.
If you want to put Market Monetarists, Krugman, MMT, and hard-core MMT in a spectrum it would be around just how directly they want to tackle unemployment. (The difference between MMT and hard-core MMT is that hard-core MMT require a JG).
Market Monetarists are most indirect in their quest for employment, having no mechanism to achieve this at all. But they mean well.
Krugman would tackle unemployment by hiring more Government Workers. He also likes Bridges to Nowhere.
MMT is OK with Government Workers, and Bridges to Nowhere, but are also OK with simply cutting taxes and putting money in household’s pockets. (A brief aside — what does it say about where economic theory is that a situation where households are short of money is dealt with in every that that AVOIDS actually giving households more money?)
Hard-core MMT would fire up the JG, which is unarguably direct (although has other problems making it, IMHO, a bad idea. Nevertheless, I do not deny that it goes right for the jugular. Or is that left for the jugular?)
SRW: How about this compromise — why don’t you agree that Cheney was right, deficits don’t matter, and cut taxes? We can also set the FFR at zero and leave it there. Since Bernanke no longer has anything to do, he can go on a speaking tour where he scrunches up his face and says “I wish I may, I wish I might, have higher NGDP!”. Sumner can cheerlead to provide social proof.
Oh yeah, we can also finally take down Wall Street because the Cheney deficit can step in for the collapse in horizontal money. It’s much easier to muzzle banks when you don’t need them to lend so much.
Something for everyone!
April 12th, 2012 at 2:51 am
2 comments:
Tom. You've got to be kidding. Why would SRW's policy compromise be politically popular? I think the standard MMT program could be made popular if marketed in the right way because it has a certain coherence. But the ad hoc-ness of SRW's proposal makes it hard to identify with.
On Winterspeak's breakdown of MMT into hard core MMT and MMT, I guess I have a problem with "OK with simply cutting taxes and putting money in household’s pockets." It seems to me that "hard core" MMT is OK with that too. After all, isn't that what payroll tax cuts are about?
Joe, it would still have to be worked out who gets to go first or if both policies should be adopted simultaneously. This is a suggestion at compromise, not an actual compromise.
But I am OK with testing the NGDP hypothesis, too. All other aspects of monetarism have failed empirically.
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