President Obama in Wednesday's speech on the war in Afghanistan referred to "an unwavering belief that all human beings deserve to live with freedom and dignity" in justifying our huge expenditures of money and blood in that country.
We all agree that all human beings deserve to live with freedom and dignity--including those who live in the United States of America.
It seems very strange that we can invest so much effort in trying to bring freedom and dignified living conditions to other distant nations before enabling our own citizens to achieve these rights.
We are able to pour billions of dollars into far-flung efforts even with minimal expectations of success but seem stymied in addressing unemployment disasters at home.
Paul Krugman in his Wednesday column says:
Not really a surprise, but still shocking. The Fed predicts disastrously high unemployment as far as the eye can see.
And in response to this dire prospect, it declares its work done.
...
So the Fed agrees that something should be done to greatly increase demand.
But it washes its hands of the problem, even though Bernanke and his colleagues are well aware that nobody else will act.
(source: http://krugman.blogs.nytimes.com/...)
Commenter "ploatman" reacts to Krugman's statements:
None of the VSPs are included in that number of unemployed, so the "unfortunates" can go crawl in [a] hole, for all they care. And since most of the unemployed have lost their health insurance by now, their life expectancy is compromised, so they probably won't "waste" too much taxpayer money by drawing their social security for too long. You think I am kidding or being sarcastic? No way, Jose-welcome to the Brave New World [o]f moral cowardice...
The situation is so dire that even moneyed financiers are recognizing the foolishness of leaving so many people without the means to purchase even the necessities of life. Bill Gross, co-founder of PIMCO, was quoted in Joan McCarter's FP diary Wednesday:
What the country needs, Gross said, is real stimulus now, and a measured return toward fiscal balance in the years ahead.
(http://www.dailykos.com/...)
Washington needs to get over its obsession with deficit-spending worries and inject some serious money into the economy to provide jobs for suffering Americans, in the process raising the demand for goods and services.
How to provide jobs
Warren Mosler (http://www.dailykos.com/...) proposes a federal job guarantee at $8 per hour for anyone willing and able to work. This would provide a transition from joblessness to work in the private sector. There is much useful work that could be done, even without competing with private companies. I would suggest, for example, mass tree plantings to help mitigate climate change.
Modern Monetary Theory (MMT) guru Mosler, addressing the threat of further layoffs at the state level, also proposes that the federal government grant state governments revenue at the rate of $500 per capita.
Economists following MMT principles assert that the federal government can do this with its power to issue fiat money (often disparagingly referred to as "printing money"). Co-blogger Nellebracht explains:
There is nothing wrong with printing money, it's part of the government's legitimate role in the economy. The problem lies with where that printed money goes. If it's used to finance bond-buybacks, we get increased speculation in markets and bubbles; essentially stagflation.
If it's used to stimulate consumption spending as opposed to investment spending, then the economy grows (i.e. increases output) until it is incapable of growing any further, at which point it inflates. And this sort of inflation is true inflation, rising prices include wages, maintaining the purchasing power of wage-earners, while depleting the purchasing power (for both consumption and investment) of return earners.
Source: http://www.dailykos.com/...
It is necessary, of course, that Congress agree to this move.
Further Reading in Modern Monetary Theory (compiled by Selise):
Bill Mitchell, Stephanie Kelton, Warren Mosler, Marshall Auerback, L. Randall Wray, Pavlina Tcherneva: Fiscal Sustainability Teach-In and Counter-Conference
Lynn Parramore and new deal 2.0: The Deficit: Nine Myths We Can’t Afford
Warren Mosler:
Seven Deadly Frauds of Economic Policy
William Mitchell:
Barnaby, better to walk before we run
Stock-flow consistent macro models
Deficit spending 101 – Part 1
Deficit spending 101 – Part 2
Deficit spending 101 – Part 3
L. Randall Wray:
Understanding Modern Money: The Key to Full Employment and Price Stability
James K. Galbraith:
The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too
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.
Thank you for reading and reccing
psyched
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