Right now, in the United States, over 25 million people who want to work, are without work or are working part time cause they can't find full time work.  That's larger than any army on Earth.  Can you imagine what could be accomplished in this country if, instead of wasting all their talent and energy, we used this army of the unemployed to accomplish something?  To give us an idea of how much opportunity is being lost every single day, let's crunch some numbers.  All these numbers are from the July 2011 Employment Statistics.

There are officially 13,931,000 people unemployed and actively looking for work.  There are another 2,785,000 people not actively looking for work(for various reasons), but would take a job if one was offered.  That is 16,716,000 full time unemployed.  Finally, there are 8,396,000 people who are working part time, but would work full time if given the chance.  If we assume that full time is 40 hours a week, and the people working part time are only working 20 hours a week, but want to work 40 hours a week(all perfectly reasonable assumptions) we will arrive a shocking number.  Every work day we are losing up to 167 million hours of lost labor.  Can you imagine for a moment what you could accomplish if you had a 167 million extra hours at work?

Since we aren't a 5 days a week economy let's calculate the damage over the whole week.  If we assume full time people work 48 weeks a year and crunch the numbers we can see the damage is that we are losing - on average - 110 million hours of productive labor every day of the week including weekends and holidays.

Still don't have the full picture of what's being wasted every day?  How about this.  If a person works full time every year of her life from the age of 17 to 67 that's 86,400 hours of work a person would spend at work.  Divide that into 110 million hours and you get well over 1200 hundred lifetimes of work being lost every day of the week (including holidays and weekend!).

Don't you wish they would report THAT number of the news everyday?  "1200 workers lost today because of the bad economy.  How long will this carnage last?"  Instead we hear about the "Dow Jones going up or down 1.5%" as if it were a legitimate gauge of economic activity.  Maybe if we learned about the loss of 1200 lifetimes of work, we'd start worrying more about our unemployment rate, and a little less about some numbers in the computer at the federal reserve known as the federal debt.

Now, being a MMT person, I believe that the only constraint of the federal budget is inflation, not tax revenue.  Furthermore, I believe that once we all realize that, that we can have full employment with zero long term inflation.  However, I understand that many people are concerned that if we continue to have large budget deficits that it'll always lead to inflation.  Now, I don't believe that(see here and here for why), but are you really going to compare the costs of maybe a little bit more inflation sometime in the future, to losing 1200 workers every single day?

Well, you may not, but our good friends in congress certainly do.  In fact, they are so worried about the possibility of inflation, and fictional budget constraints that they have now create a whole super-congress to fight budget deficits while the economy continues to kill 1200 young workers every single day.  Our leaders think that money is limited, so they let 20 million workers stay idle - even though Labor is limited.

Labor is the most precious resource we have.  Why?  Unlike commodities like oil and gold, we can't "save" labor.  If 20 million people don't work today, there's no way to gain back all the things they could have made or done.  Despite this fact our Leaders, Media, and Businessmen continue to ignore the issue.

When I look at these numbers and the things that congress is doing I get really discouraged.  The fact that even the Democrats and their standard-bearer are encouraging this kind of behavior is nearly enough to drive me right out of politics.  I never will quit though.  Because the same reason I get discouraged is the same reason I can keep going.  1200 young workers are lost EVERY SINGLE DAY.

I have little faith that the current political establishment will ever realize that the only limits on our federal budget is based entirely on what the economy can produce and if the government tries to buy more than what's available it'll cause a shortage and that shortage will show up as inflation.  Maybe one day we'll have a congress and president that cares more about unemployment than fictional budget constraints or the possibility of inflation in the future.  I pray for that day, and I will continue to work for that day.  If you're still reading this diary, then it must mean that you do care.  If you do, I hope you'll join me and learn more about MMT and why it is essential that our leaders in Washington and the Media understand how our money actually works so we can quit losing 1200 people EVERY. SINGLE. DAY.

Much of this analysis is based on Modern Monetary Theory (MMT). It's a (relatively) new "Post-Keynesian" economic school of thought.  If you're interested in learning more, please follow our group, Money and Public Purpose.  Also, there is a small, but growing MMT wiki that is worth checking out.  I'm also starting a facebook page as another avenue to get people's attention.

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#### Comment Preferences

• ##### Tip Jar(7+ / 0-)

Our Dime Understanding the U.S. Budget

• ##### I must be old-school because MMT(0+ / 0-)

can't explain to me why how much labor out there matters when there is no demand.

Demand, demand, demand, demand, demand...and, oh yeah, demand. The fed can and should create job programs to put people to work rebuilding our infrastructure, and if necessary pay people well to lead the various efforts so we don't get more BS about "shovel-ready" this and that. The money spent bolsters the economy several ways and provides current businesses a better infrastructure for which to operate in.

The reason I don't subscribe to the "labor theory of value" is because labor without demand for it is just as worthless as a bunch of supply-siders arguing for tax breaks so they can make shit people aren't going to buy without spending power anyway.

"However, I don't think that critiquing one precludes praising the other" - The Troubador

• ##### No Labor Theory of Value(1+ / 0-)
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psyched

I didn't mean to imply that I believe in the labor theory of value.  What I was trying to do was contrast the cost of the thing that our leaders are worried about(inflation) to the cost of unemployment(that nobody in power is talking about).

MMT economists recognize that increasing demand is one of the best ways to put people to work - and that happens by the federal government deficit spending.  MMT economists also suggest putting people to work on public works projects for people who cannot immediately find work.  That way their wages will be added to demand, and the rest of us can benefit from their work.

Our Dime Understanding the U.S. Budget

[ Parent ]

• ##### I thought MMT'ers were mostly concerned with(0+ / 0-)

things like you wrote (inflation, etc) as well as interest rates, exchanges rates, etc. Am I incorrect?

"However, I don't think that critiquing one precludes praising the other" - The Troubador

[ Parent ]

• ##### Defining MMT'ers(1+ / 0-)
Recommended by:
psyched

I find that the thing that best defines MMT'ers isn't necessarily what we're concerned about, so much as what we are not concerned about: Budget Deficits.  MMT'ers concern ourselves with the other things you mention because they are the issues people bring up when we say things like "deficit spending isn't a problem(at least not right now)".  People say, "well interest rates will go up", so we have to describe why the won't.  Then they say "it'll cause inflation", so we have to explain why it won't.  Then they bring up trade deficits and exchange rates, and we have to explain why deficit spending doesn't cause that.

However, through all that, MMT'ers are still Keynesians at heart, even if we are technically "Post-Keynesians".  When Warren Mosler, the original MMT'er, talks about how to get us out our current recession, we describes it in terms of "restoring Aggregate Demand".  Figures like Abba Lerner and Hyman Minsky are held in very high esteem.

Personally, I don't view MMT as an economic revolution to replacing Keynesian economics so much as an evolution of Keynes's General Theories.

Our Dime Understanding the U.S. Budget

[ Parent ]

• ##### A great diary, maddogg!(1+ / 0-)
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