On Aug 6, 2011, at 7:07 PM, SA wrote:
> Okay, but we're talking about two different things here.
See below:
>> Spend that much on a jobs program, though, and that means creating new kinds of jobs and not just Walmart associates, right? So you spend this $500-600 billion of Fed money - and what then? These jobs will not be replaced by any broader labor market recovery they stimulate. You'd want to keep spending on this - and then you'd have to raise taxes to fund it over the longer term. And don't we want a society with fewer third houses and second Jaguars?
>
> I'm actually not clear on which scenario you're referring to here.
What kind of jobs would this Fed-financed spending create? Presumably things that are not now provided by private markets - not Walmart associates, but well-paid child care workers and high-speed rail systems. It would take continued large spending on this sort of thing even after the theoretical point of full employment were reached. And at that point you couldn't just keep printing money - you'd have to tax. What then?
Unless you're talking about using magic Fed money just to amp up the existing system, which sounds rather depressing to me.
>> Spending Fed money this way would be viewed as dire by moneyed capital, a threat to sacred property relations. Getting away with it would require a pretty different configuration of power than the one we're in now. You would have had to, in some sense, expropriated the bond market.
>
> Yes. If I understand you right, this is really the answer-behind-my-answer. Doing things the MMT way would "give people ideas" in a way that would directly threaten property relations. You would probably have to expropriate the bond market. Which is part of my secret Comtean cookshop recipe, as it happens.
Well, ok, then why talk this MMT stuff? That's geeky and evasive and ultimately fantastic.
Doug