Reddit reviews Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems

The first article is by the man who quite literally wrote the primary text book on Modern Monetary Theory, L Randall Wray. https://www.amazon.com/Modern-Money-Theory-Macroeconomics-Sovereign/dp/0230368891 He's one of the most important theorists behind MMT. So, the point is that QE =/= MMT. You have a good weekend too.

This one will cover all the bases:

Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems

>It really isn't - I've read the Seven Deadly Innocent Frauds of Economic Policy several times, and I think it's a pretty fair reading of what he says. If there is a more substantial resource out there, let me know - but it's certainly glossed over in the 7DIF.

I feel like Mosler's piece is politics, not economics. To the extent MMT has a foundational text, it's Wray's.

>As far as the central topic of discussion, isn't MMT pretty firmly on the "raise taxes" solution for inflation?

Yes, this is orthodox MMT. It's not the only answer, but it is the default answer, and one that will work reliably.

> Do you have links to the debate you're referencing?

It's pretty central to most literature on MMT.

This is a pretty readable piece to use as a starting point.

Hi Nath,

I'll reply to your points but will link through to places where we've already discussed some of these points.

Primarily we're discussing things on our nascent forum:

http://aep.freeforums.net/

and on our Facebook Group:

https://www.facebook.com/groups/520023444868205/

Tim and I are also doing a weekly podcast which is posted on YouTube and iTunes and in an XML feed:

http://www.australianemploymentparty.org/podcast.xml
https://www.youtube.com/channel/UCt3B5PX86GE_IXgZtar8xXw
https://itunes.apple.com/us/podcast/lets-get-fiscal/id1126315509?mt=2

This will give you a good feel for where everything is going in addition to the content on the website.

"I reckon MMT is like a cult sometimes. :)"

Yes it can feel that way.

"What exactly is the proposal for the specifics of the jobs - what is the nature of these jobs that couldn't be better done by automation or robots?"

The nature of jobs will change over time specifically because of automation, but in terms of work that could be done this year, there is a lot. The level of automation that will make human labour and thinking obsolete is, in my opinion, 1000s of years in the future but even if it's 50 years away that's still 50 years of work that needs to be done in the meantime.

I'm doing some posts in the forum today about specifics of a Job Guarantee but Tim and I have also discuss this in the following episodes:

https://www.youtube.com/watch?v=PNi_4--KG9g
https://www.youtube.com/watch?v=VPn8T9MI9sc
https://www.youtube.com/watch?v=LlLa4jixzoc

"Are we going to guarantee people professional jobs"

The jobs are fit to the skills of the people, not the other way around. So if there are people with professional skills who want to put those skills to use they can certainly be incorporated into a JG programme.

"and professional salaries?

No the wage is a socially inclusive minimum wage, same for all workers in the JG.

This is not to be confused with public works spending and other government projects such as R&D which is just normal government employment.

"Or is it going to be unskilled stuff like picking up garbage/planting trees: something that if we automate it, can happen 24/7 and with no need for lunch/sleep/sickdays and not have people doing menial tasks for their dole."

Some jobs might be things like landcare or community beautification/restoration. If work is automated, then we find something else for JG employees to do.

The description of this as being "menial tasks for their dole" is inaccurate: the majority of unemployment people want to work, and a JG job can be a place to learn skills that will improve prospects of private sector employment.

The common characterisation of JG jobs as "menial tasks" is usually the result of a lack of imagination and research.

Here's an example: markets and festivals employ a very diverse range of skills from administrative, design, marketing to artists and performers, production crews etc. Think something like the Melbourne Comedy Festival. This provides public benefit, is enjoyable to work on, can expand and contract counter cyclically.

That's one example, obviously that one solution doesn't solve all unmployment but you can see the types of attributes we're looking for in work that can be done.

One of the main features of a job guarantee is that it's administrated locally and funded federally so it's up to the community (including those who are unemployed) to figure out specifically what needs to be done. The government will provide support for local administrators, this has been designed in a lot of detail by CoFFEE and we'll be working with that as our academic policy basis.

"I think a basic income is a far better model than job guarantee"

Basic income is just welfare so we can just call it that.

A universal basic income is a terrible idea. Just search "UBI vs JG" to see all the reasons why.

Having better welfare systems is not mutually exclusive to having a Job Guarantee, but it is certain that welfare doesn't solve unemployment, and in particular doesn't solve the problem of youth unemployment which is worst amongst 15 - 19 year old school leavers who are unemployed at a rate of 64%. They should be able to get work under a job guarantee that will prepare them for private sector employment. If we just give them money, how does that improve the prospects of our society to produce anything meaningful.

"And the old MMT government printing money to solve all problems"

All government spending is money creation. I have done some basic explainers here:

https://www.youtube.com/watch?v=pOV_u-RWSCY&list=PLT4Jth7jJj8Z9FyAycR_WWuVmiP2Ou0gm

But even if you look at our current regulatory framework, you can see that government spending is money creation: the government issues bonds in order to deficit spend. Where do the bonds come from?

They're "debt", same as reserves are. In fact, bonds and money are virtually the same thing; bonds are basically "reserves on which we pay interest".

"I believe Pauline Hanson was in favour of that and she's in the system again."

So?

"In the real world of doing this you get inflation"

We always have a little bit of inflation (because it's much better than deflation) but a job guarantee maintains price stability.

"Just because austerity and neoliberalism is bullshit, doesn't make MMT right or better"

MMT is 100% right. You can disagree with the policy outcomes and have a progressive, conservative or regressive approach on top of MMT, but it is certainly the most complete description of how monetary systems work.

"In terms of austerity: Inflation impacts on the poorest too - so print too much money = eroding what little the poor have + increasing their costs."

So we shouldn't implement a universal basic income. A JG is the best way to decide how much the government should deficit spend in order to maintain aggregate demand at a suitable level without destabilising prices, and at the same time increasing the real capital resources available to the society.

"So I don't really see a job guarantee being a forward thinking policy"

That's because you don't really understand it. I'd recommend reading this book:

https://www.amazon.com/Modern-Money-Theory-Macroeconomics-Sovereign/dp/0230368891

and following along the discussions on our forum.

"much as its proponents want to believe it's "progressive""

I don't really think in terms of "what's progressive" but it's certainly a good idea.

"Sounds more like a conservative wet dream"

No, but UBI is.

"(it is a work for the dole scheme"

No, it's not. WFTD is a private sector wage subsidy for a poverty wage. A JG is very different from that.

"Abbott's "Green army" is an example of an MMT compliant concept)"

All concepts in economics are "MMT compliant" because MMT describes how money and economics works.

Abbott's Green Army is a terribly designed and implemented proposal created by a monstrous moron.

"and seems to have somehow ignoring that automation is an inevitable thing for the last several decades"

Everyone always says that at all times in history ever. Just because you can't imagine jobs that will exist when trucks are driven autonomously doesn't mean they won't exist.

We are 1000's of years from Star Trek. In the meantime (and especially in the very near term) there is lots of work that needs to be done.

"It's clinging to the idea that there is actually enough meaningful jobs to give everyone after all the progress via technology"

There are. You just have to stop thinking that the only thing unemployed people are fit to do is pick up garbage.

"- if that was the case then automation/technology and science would need to down tools."

No, we never advocate artificially constraining productivity in order to create jobs.

We do, however, acknolwedge that if the spoils of automation are shared evenly then we should all be working less! Just not zero.

MMT: http://www.amazon.com/gp/product/0230368891