############################Hi Chance,
Here's a couple of good blog posts (for the layperson) from an MMT economist, (Ellis Winningham), on the JG vs. UBI proposals. They sum up the relevant issues quite nicely.
A Few Words on UBI and the Job Guarantee
Universal Basic Income: An Economic "Destabilizer"
Have a good one,
JasonOn Thursday, May 31, 2018, 10:28:11 PM EDT, Chance McDermott <[log in to unmask]> wrote:Hi Jason,What about a UBI tied to a percentage of total wealth in the system?The works program you mention is popular with my younger liberal friends. It retains the "work or die" mentality that I hope we can transcend in the future, but it is certainly preferable to the prison funnel system we have currently.-Chance############################On Thu, May 31, 2018 at 8:13 PM, nysa71 <[log in to unmask]> wrote:Dave & Chance,
Actually, a UBI --- or at least a standalone UBI --- is problematic because it adds net dollars to the economy without any corresponding real output, and hence would most certainly be inflationary, thus leaving those at the socioeconomic bottom in the same place that they are now, relatively speaking, (i.e., more income, but higher general prices).
A superior proposal, (and one strongly advocated by MMT economists) is The Federal Job Guarantee, (i.e., a federal policy of full employment). The basic idea is that it's federally funded, but locally managed.
So if someone is unemployed, (or even under-employed), they can go down to the local Job Guarantee (JG) office, and work with the administrator to find something to do in the community. Maybe the person likes gardening. He/she could plant some flowers along a local hiking trail. Maybe he/she loves animals. Head over to the animal shelter. Has a passion for abused women? Head over to the domestic abuse shelter. Love reading? Go help out at the library. And so forth.
It doesn't really matter. Just do something in the community that has value to the community.
And since it's federally funded, it's adding dollars to the local economy with a corresponding real output, and hence insuring price stability.
So what do JG employees do with their paycheck? They spend it. And that spending becomes income for someone else --- a significant amount being income for local businesses. (And local businesses spend their income, which becomes income for someone else, who, in turn, spends it, and so forth.)
So business income increases, meaning business and business income goes up in the local private sector, meaning they have both the need and the dollars to hire more people...and they can hire people from the JG, (which essentially functions as a buffer stock of publicly employed people, unlike the current state of affairs where we have a buffer stock of unemployed people).
So some JG employees transfer from the public sector to the private sector, meaning less federal dollars will be injected in the local economy, but it's not needed since the economy is now on the upswing. (Hence why the JG is what economists refer to as an "automatic stabilizer"...more dollars added to the economy in a downturn, less dollars added to the the economy in an upturn.)
And whatever the wage is for JG employees effectively becomes the floor on what workers in our society will be paid. So if the JG is $15 per hour (for example) then that effectively becomes the minimum wage since no one in their right mind is going to go work in the private sector for less than $15 per hour when they can make $15 in the JG program. It effectively empowers labor.
And that's why the likes of Zuckerberg and Musk advocate for a UBI. It is no threat to them. And they know it.
The Federal Job Guarantee, on the other hand, is a threat to them.
In short, a standalone UBI is just another neoliberal proposal that only appears to make progress. In reality, it does no such thing.
Don't fall for it.
~ Jason BesseyHi all,First, thank you Joe for some of the insider baseball perspective on Peterson and a wonderful sociological and administrative analysis. Gregg, your encouragement to travel as a group into the weeds and develop principle-based solutions is inspiring during a time of intense micro ingroup/outgroup formation. Jason, I appreciate that you offer an economically populist perspective.More on the point that Jason and Dave are suggesting is a consideration of proportionality. The functional option from my humble perspective is a Universal Basic Income that is tethered to a percentage of total wealth. Healthcare, education, food, shelter, and safety should be guaranteed non-conditionally. Essentially we are covering the first two levels of Maslow's Hierarchy of Needs. It takes nothing substantively from industrial geniuses like Elon Musk, Donald Trump, or Mark Zuckerberg (they retain status at the top of hierarchies), and instead improves the lived experience of everyone.There are obstacles from the conservative and liberal side both that boil down to this particular justification:Work hard or die.How do we get around that one?-Chance############################On Thu, May 31, 2018 at 10:31 AM, nysa71 <000000c289d6ba14-dmarc- [log in to unmask]> wrote:Dave,
I'm beyond delighted to see someone else here understand MMT. It can not be emphasized enough, IMO, that the general public needs to understand it.
On one technical note, it's not even as complicated as "printing" money. Most money is just created via keystrokes ---- marking up accounts in bank computers.
Even paper money doesn't add net financial assets to the economy. It simply transfers numbers from a balance sheet at the central bank to numbers on pieces of paper you can carry around in your pocket.
Money is a unit of account. It's the numbers that's the money, not the paper, (anymore than it's a spreadsheet or a computer screen).
Also, (in finding a way to connect MMT to psychology), "money", in a lot of ways, is analogous to a Token Economy in applied behavioral analysis.
Again, I was delighted to read your comments!
~ Jason BesseyDear All,############################I've not weighed in much on the conversation because much of the discussion, in psychological terms, is beyond my ken. But I would like to weigh in on the current economic thread.Jason has very succinctly pointed out the inherent instability in capitalism, it's innate tendency to make the rich richer and the poor poorer. When the old Soviet Union existed as a counterweight to laissez faire capitalism, capitalism had to maintain a kinder, gentler facade. After the collapse, no holds have been barred with the result that the world's oligarchs have increased their wealth and power to the detriment of nearly everyone else, here and elsewhere. So, as Jason points out, governments should intervene, to stabilize the system. Unfortunately, ours, by "neoliberal economics" and in decisions like "Citizen's United" and the recent tax law, has intervened decidedly on the side of the wealthy and the oligarchs. Inequality in the US is at a level that often triggers revolution.There is a missing piece to the economic landscape, however, that offers a legitimate way for monetarily sovereign nations to intervene in economically beneficent ways. The notion is counterintuitive, because most of us are under the mistaken impression that federal budgets are analogous to family budgets. Expenditures must be balanced by income. Families, however, cannot legitimately print money. Sovereign governments can. The argument against this is that printing money is inflationary, Weimar Germany being the oft-cited example.Modern monetary theory (MMT) holds that the printing of money is allowed and is inflationary only when the country is at full production and full employment. Abe Lincoln financed the Civil War by printing "greenbacks" and Hitler built his war machine with fiat money. Indeed, recently, the US has printed trillions of dollars for the Afghan and Iraq wars and the 2008 bailout, yet inflation remains low.MMT sees the federal budget as essentially the inverse of the family budget. Taxation is necessary not to generate revenue but to slow the economy if it becomes overheated. MMT proponents would say that we always have enough money for our priorities, which in an ideal world would include infrastructure, universal education, universal health care, and many other common goods. In this light, austerity measures should be seen for what they are: political tools not fiscal responsibility. And the recent tax overhaul, which will increase the national debt by $1.9T exposes, voted for those who previously touted "fiscal responsibility," exposes the sham.--C. David ("Dave") PruettProfessor EmeritusDepartment of Mathematics & StatisticsJames Madison University540-246-3087 (Home)------------------------------ ------------------------------ -------Author of Reason and Wonder (Praeger, 2012)To unsubscribe from the TOK-SOCIETY-L list: write to: mailto:TOK-SOCIETY-L-SIGNOFF- [log in to unmask] or click the following link: http://listserv.jmu.edu/cgi- bin/wa?SUBED1=TOK-SOCIETY-L&A= 1
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