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Subject:  Re: On Argentina, Krugman, Mosler, and Wenzel Date:  2/14/2013  7:17 AM
Author:  warrenmosler Number:  394289 of 404

I support offering a transition job to anyone willing and able to work, as an alternative to the current policy of unemployment.

At the same time we need a fiscal adjustment- tax cut and/or spending increase, depending on your politics- to increase aggregate demand/sales/private sector employment to the point where the number of people in the transition job program is at a minimim.  

Because those in a transition job are 'more liquid' with regard to obtaining private sector employment than unemployed, the transition job program should prove a far superior price anchor/buffer stock vs today's unemployment, which means we can sustain a lower level of buffer stock workers than would be needed for buffer stock unemployed.  So in fact the transition job both increase price stability and increases the size of the private sector.  (unemployed are not in the private sector)

By the way, Argentina did this in 2001 and it was an unqualified success.  It was called the Jefes program, or something like that.  Over 1 million people transitioned from long term unemployment to private sector employment in about 2 years.

Regarding inflation measurement, CPI is designed as a cost of living index rather than an 'inflation' index in the academic sense.  Presumably this is done for the further public purpose of making adjustments for changes in the cost of living for targeted populations, etc.

That's a political choice to be respected and debated.  What MMT can do is show how various policy adjustments can be used to influence cpi.  For example, tobacco tax is in cpi, so lowering that tax would lower cpi.  and if cpi is going up because of a foreign monopolist hiking oil prices mmt might, for example, be used to show how causing unemployment to go up isn't going to change the price of fuel in any meaningful way, and how we are always better off at full employment that with mass unemployment.

The important contribution of MMT is it's explicit identification of the currency itself as a simple public monopoly, and all the ramifications thereof:  



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