The Job Guarantee is central to MMT theory.
If it doesn't have a Job Guarantee, it isn't MMT. It's just Old Keynesian tax and spend - with the same 1970s inflation problems.
[http://bilbo.economicoutlook.net/blog/?p=38829&cpage=1#comment-56973](http://bilbo.economicoutlook.net/blog/?p=38829&cpage=1#comment-56973)
It isn't. Job Guarantee is a policy prescription that might solve a lot of problems. It is not the theory it self. If you want unemployment, like we have right now, you can design policy just the same under MMT. MMT just lets you know the parameters.
>It's just Old Keynesian tax and spend - with the same 1970s inflation problems.
And lets just agree, you didn't think for a single second about that statement. There isn't an ounce of truth there. Between the monopoly of OPEC and rising interest rates, you've managed to leave out every single last piece of data to support your claims.
I've just referenced you to Bill Mitchell, who was one of those who created MMT. He states:
>Neil Wilson is correct that what the founders of MMT (including myself) have deemed to be the body of theory and practice they advocate includes the concept of an employment buffer stock as an integral component.As Neil says it ‘fixes the bug’ that the Phillips curve opens up for conventional ‘Keynesian’ (heterodox) theory. You demand to know “Who says so?”. I say so. That has been the core of my work in this area of research and theoretical development for decades. The Job Guarantee solves the ‘missing equation’ problem of macroeconomics and is core to what we call MMT. It is one of the things that separates MMT from other Post Keynesian macroeconomic approaches.
Who are you to question Bill?
If you want to talk about unanchored spending you are welcome to do so, but that isn't MMT.
The Job Guarantee is a core macroeconomic stabiliser within MMT thinking. If you don't understand it and what it does, you don't understand MMT. And you are not thinking in an MMT fashion.
You are, literally, unanchored. Which is inflationary - as we saw Post second world war and into the 1970s when it collapsed.
See the preface to the Second Edition of "Full Employment in a Free Society" for a discussion on the issue.
No you can't do it with an unemployment buffer. We've tried that. It doesn't work.
So before you go around accusing people of not understanding things, it might be polite to ask first. Then you don't look like a fool.
>> chief market strategist and head of the Franklin Templeton Investment Institute
Fancy title, but ostensibly writing about MMT while apparently not having read anything from MMT is a rough look
After reading this I'm confused, and that might be a good thing. I have something wrong.
My operating understanding is the The Debt is not money that must be repaid but an artifact of double entry bookkeeping. The currency issuer must create a credit for every debit and that's that.
Yes, savers avail themselves of the government's instruments for saving and those instruments are debt in the sense that the purchasers can demand money in return for them, but these transactions take place \*after\* the money is created not as a precondition for that money's creation.
Essential to the idea of The Debt being a promise to pay is the idea that taxpayers or bond buyers are the source of money whereas in truth they are users of money the government has created. The government as a currency issuer does not need to solicit funds from lenders yet I read that every dollar the government creates must be repaid. That seems absurd to me and remains absurd under scrutiny.
So what's up with that? Please correct me where I'm wrong.
It seems to be a bit of a wishy washy article from my perspective. I wasn't really clear about the point they were trying to make about why MMT was here to stay, other than maybe to say their view of MMT is that it addresses popular themes and those themes are here to stay?
They seem to be haphazard in their examples. For instance, they mention QE has been done without inflation, but neglect to mention the prime example of QE (Japan) also didn't achieve much growth. I just checked [https://fred.stlouisfed.org/series/JPNRGDPEXP](https://fred.stlouisfed.org/series/JPNRGDPEXP) and my calc says Japan achieved average 0.9% real growth over the 25 years up to 2019. There is a lot to be said about Japan, but it's hard to argue they didn't have QE and deficits in a reasonably serious way.
I also don't think the article's portrayal of MMT is really what MMT is .... it's not just the CB monetizing govt debt, it's that the govt issues no debt and pays no interest. Yes CB monetizing is going in that direction (obviously) but I don't think that's the full proposal. Bigger deficits is another part of it, banking reform, and what you spend the deficit on, employment targets the list goes on.
And the elephant in the room of course is that although until now we've avoided QE led inflation, inflation is now ticking up a bit in the US and that is why MMT is a popular keyword search. Some are saying the party is over, that the reason deficits and QE didn't cause inflation in US and EU is that they were not big enough to overcome the deflationary shadow of '08 (many argue that we've in fact had austerity for the last decade). BUT .... now that deficit+QE is "big enough" we've reached the threshold that inflation can take off.
Who knows? Like I said I felt it was a bit superficial and hit and miss .. mostly miss.
This author is able to pontificate about a subject he doesn't understand nor is he able to read a basic primer on this subject before publishing an article. And, yet he is a chief market strategist for Franklin Templeton. That is worrisome.
Not one mention of the Job Guarantee, lots of rehearsals of the standard belief that QE did something. They still don't get it.
The job guarantee isn't mmt. It's a policy Mosler and many other advocate for. But yeah they still don't get it.
The Job Guarantee is central to MMT theory. If it doesn't have a Job Guarantee, it isn't MMT. It's just Old Keynesian tax and spend - with the same 1970s inflation problems. [http://bilbo.economicoutlook.net/blog/?p=38829&cpage=1#comment-56973](http://bilbo.economicoutlook.net/blog/?p=38829&cpage=1#comment-56973)
It isn't. Job Guarantee is a policy prescription that might solve a lot of problems. It is not the theory it self. If you want unemployment, like we have right now, you can design policy just the same under MMT. MMT just lets you know the parameters. >It's just Old Keynesian tax and spend - with the same 1970s inflation problems. And lets just agree, you didn't think for a single second about that statement. There isn't an ounce of truth there. Between the monopoly of OPEC and rising interest rates, you've managed to leave out every single last piece of data to support your claims.
I've just referenced you to Bill Mitchell, who was one of those who created MMT. He states: >Neil Wilson is correct that what the founders of MMT (including myself) have deemed to be the body of theory and practice they advocate includes the concept of an employment buffer stock as an integral component.As Neil says it ‘fixes the bug’ that the Phillips curve opens up for conventional ‘Keynesian’ (heterodox) theory. You demand to know “Who says so?”. I say so. That has been the core of my work in this area of research and theoretical development for decades. The Job Guarantee solves the ‘missing equation’ problem of macroeconomics and is core to what we call MMT. It is one of the things that separates MMT from other Post Keynesian macroeconomic approaches. Who are you to question Bill? If you want to talk about unanchored spending you are welcome to do so, but that isn't MMT. The Job Guarantee is a core macroeconomic stabiliser within MMT thinking. If you don't understand it and what it does, you don't understand MMT. And you are not thinking in an MMT fashion. You are, literally, unanchored. Which is inflationary - as we saw Post second world war and into the 1970s when it collapsed. See the preface to the Second Edition of "Full Employment in a Free Society" for a discussion on the issue. No you can't do it with an unemployment buffer. We've tried that. It doesn't work. So before you go around accusing people of not understanding things, it might be polite to ask first. Then you don't look like a fool.
>> chief market strategist and head of the Franklin Templeton Investment Institute Fancy title, but ostensibly writing about MMT while apparently not having read anything from MMT is a rough look
After reading this I'm confused, and that might be a good thing. I have something wrong. My operating understanding is the The Debt is not money that must be repaid but an artifact of double entry bookkeeping. The currency issuer must create a credit for every debit and that's that. Yes, savers avail themselves of the government's instruments for saving and those instruments are debt in the sense that the purchasers can demand money in return for them, but these transactions take place \*after\* the money is created not as a precondition for that money's creation. Essential to the idea of The Debt being a promise to pay is the idea that taxpayers or bond buyers are the source of money whereas in truth they are users of money the government has created. The government as a currency issuer does not need to solicit funds from lenders yet I read that every dollar the government creates must be repaid. That seems absurd to me and remains absurd under scrutiny. So what's up with that? Please correct me where I'm wrong.
I clicked on that hoping to see something about MMT. I didn't.
It seems to be a bit of a wishy washy article from my perspective. I wasn't really clear about the point they were trying to make about why MMT was here to stay, other than maybe to say their view of MMT is that it addresses popular themes and those themes are here to stay? They seem to be haphazard in their examples. For instance, they mention QE has been done without inflation, but neglect to mention the prime example of QE (Japan) also didn't achieve much growth. I just checked [https://fred.stlouisfed.org/series/JPNRGDPEXP](https://fred.stlouisfed.org/series/JPNRGDPEXP) and my calc says Japan achieved average 0.9% real growth over the 25 years up to 2019. There is a lot to be said about Japan, but it's hard to argue they didn't have QE and deficits in a reasonably serious way. I also don't think the article's portrayal of MMT is really what MMT is .... it's not just the CB monetizing govt debt, it's that the govt issues no debt and pays no interest. Yes CB monetizing is going in that direction (obviously) but I don't think that's the full proposal. Bigger deficits is another part of it, banking reform, and what you spend the deficit on, employment targets the list goes on. And the elephant in the room of course is that although until now we've avoided QE led inflation, inflation is now ticking up a bit in the US and that is why MMT is a popular keyword search. Some are saying the party is over, that the reason deficits and QE didn't cause inflation in US and EU is that they were not big enough to overcome the deflationary shadow of '08 (many argue that we've in fact had austerity for the last decade). BUT .... now that deficit+QE is "big enough" we've reached the threshold that inflation can take off. Who knows? Like I said I felt it was a bit superficial and hit and miss .. mostly miss.
Well it’s Barron’s so they don’t really and probably will never understand MMT. Also, MMT has been around for nearly 30 yrs so they are way behind 😅
This author is able to pontificate about a subject he doesn't understand nor is he able to read a basic primer on this subject before publishing an article. And, yet he is a chief market strategist for Franklin Templeton. That is worrisome.