Pavlina Tcherneva-ri egindako elkarrizketa, 2020an

MMT Podcast (Christian Reilly)@MMTpodcast


MMT Podcast ep 47: Christian & @PatriciaNPino

talk to economist, author and core MMT academic @ptcherneva about recent measures aimed at mitigating the impact of the coronavirus pandemic and how to build a more rational, just and resilient economy.

Entzun hemen:

#47 Pavlina Tcherneva: Building Resilience – The Case For A Job Guarantee


2020 api. 22

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    [Transcript] Opening monologue for Episode 47 – Pavlina Tcherneva: Building Resilience – The Case For A Job Guarantee

    At the beginning there you heard our guest this week, author and Associate Professor Of Economics at Bard College, Pavlina Tcherneva – and we’re going to be talking to Pavlina in a moment about the economic impact of the coronavirus pandemic but also we’ll also be looking ahead to the recovery effort, and asking what a more rational and resilient economic system would look like. Of course right now, the drive should be to get money into people’s hands as fast as possible as unemployment skyrockets, but I think it’s also going to be useful to have a vision of what should we be pushing for longer term.

    Pavlina is known for her extensive research and advocacy of the MMT Job Guarantee, and to borrow the title of Pavlina’s forthcoming book, I’m going to outline a case for the Job Guarantee, as I see it.

    The MMT descriptive framework for understanding modern money is that each time the government spends a pound, dollar, or yen (depending on where you live), it spends a new pound, dollar or yen into existence, rather than taking money from somewhere else in order to spend it out again. The government is the monopoly issuer of its own currency, and it spends and taxes by changing bank balances, which are just numbers on a spreadsheet, using computer keystrokes at its central bank.

    Because fiat currency – dollars, pounds, yen – has no intrinsic value, the government creates that value by demanding taxes be paid in pounds dollars or yen, ensuring a permanent demand for its currency, and allowing it to spend its otherwise worthless currency tokens into existence (again, using keystrokes) and this allows it to pay for things it needs to provision itself – and this creates government sector jobs. The government, most of the time, spends more than it takes off us in tax and that money left over, held by us in the private sector is what we use to transact with each other and create private sector jobs.

    And this brings us to the Job Guarantee. In a system set up like this, if there is residual unemployment after the government has done all of its spending, and the private sector has done all of its spending, the unemployment that remains is there because there is not enough spending power in the economy to ensure everybody has a job. So the government has either spent too little into the economy or taxed too much out of it.

    And it’s entirely the government’s responsibility to change this. It’s not the fault of private individuals for, say, not spending more in a recession, or the fault of firms for laying off people because their incomes have gone down. Only the government can counter a trend of rising unemployment, because it’s the only actor in the economy that can spend more than it takes in, permanently. It’s the only actor in the economy that can act, as they say, counter-cyclically.

    The MMT view is the way to fix this is to put more spending power into the economy – and that means increasing the deficit – and when you’re the currency issuer, the government, there are two ways you can do that, you can either increase government spending or lower the tax on the whole economy – or both – depending on your politics. As economist L. Randall Wray says, MMT is consistent with a small government and it’s consistent with a big government.

    But the problem is that it’s impossible to target a precise deficit figure in money terms that will ensure full employment, but also avoid inflation – because that ideal number is a moving target. So governments have historically made the choice to avoid inflation by ensuring unemployment, and using sanitised terms like “the natural rate of unemployment” to justify the hardship and social destruction caused by this choice.

    So what we have at the moment is a system of what’s called macroeconomic automatic stabilisers. When unemployment goes up, more people go on unemployment benefits, and money paid from the government to the economy goes up, which increases the deficit automatically, and also because the private sector is earning less as whole, tax payments from the economy to the government go down – also increasing the government deficit. So automatically, the deficit increases in a downturn and decreases in a recovery.

    And that’s the way we manage inflation at the moment – with an expanding and contracting buffer stock of unemployed humans (people who would take a job if they could find one). And these people are paid just enough to hopefully not die, but unfortunately in many cases it’s not enough, and we do all this in order to control inflation.

    The MMT proposal is to change this buffer stock from an unemployed one to an employed one, by having the government guarantee an offer of a full-time job at a socially inclusive wage (not a subsistence wage) to anyone that wants one. It’s not designed to replace any other type of benefit, especially disability benefits – it’s voluntary, you can still choose unemployment benefits if you want, it’s only designed to replace involuntary unemployment – and it’s locally administered but funded by central government, which to bring this full circle, is the only actor in the economy that can never run out of money.

    If you want more detail on what this would look like on the ground, we’ll be talking to Pavlina about it in a moment, but also you can listen to our episode 4 with Dr Fadhel Kaboub for an introduction, and you should definitely pre-order Pavlina’s book, The Case For A Job Guarantee, and I’ve linked to where you can do that in the show notes. There is also a link to Pavlina’s fantastic Job Guarantee FAQ page – which, until her book comes out, is a great way to understand more about it.

    Thank you as ever for sticking with us and putting the time into understanding modern money – if you can support us financially, it really helps keep the show going, there’s a link to our Patreon page in the show notes, but really we’re just grateful for your time and attention, and we hope you’re staying safe and well. Let’s dive in.

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