Creating Full Employment When You Must
Feb 16, 2011 02:54 PST
[copy of a post to Economics Community]
To Smith and Jones ~
You both see the need for more jobs to employ people and more supply of
what such people might buy as needs to be met automatically by the
American system as it is.
..... You are willing to stand on your faith is automatic
self-correction until hell freezes over -- as Adlai once said (in the
Cuban Missile Crisis that responded to Kennedy's quarantine of that
I, on the other hand, having faith in Keynesian truth (that the money
supply is not a neutral factor in the struggle to outproduce deficits in
food, water, housing, health, education, etc. without which life is hard
on people in need thereof.)
You two see deficits in tax collection as determinative of future supply
-- I see tax collection as something we can ease by printing more money.
One side of this disagreement is profoundly wrong. Keynes and Nixon have
set the stage for an unlimited money supply to employ all hands and
manage national and global economies as we do in wartime when we cannot
afford to see people idled by too little money ready to make our
We do agree, I'm sure, that prices must remain affordable and,
therefore, newly printed money cannot all be spent ahead of new supplies
of what new workers will buy -- except with the help of such wartime
tools as rationing and price control.
Nobody wants wartime command rules imposed on an economy that does not
need them. But, today we may need them in order to immediately put us
all to work and get rid of desperate conditions that destroy the morale
and health of people out of work.
Perhaps you were not alive with me when Pearl Harbor ended unemployment
and poverty overnight for nearly every American. It was a remarkable
time. Keynesian thought ruled the world and the global depression was
Unfortunately, Nazis and Japanese aggressors made war to conquer the
world. They had to be killed in their millions because they were killing
millions of others in their attempt at conquest.
Today we could replicate the end of all unemployment overnight. We would
not have to kill anyone. Out of work Egyptians could be rewarded for
their guts. Americans could be rewarded for their skills and decency.
Most Americans and Earthlings do not see it this way. They are waiting
for the self-correction of business that may become effective in several
more years. Fortunately, few will die of starvation. Families will take
care of some. Friends will take care of others. Many will resort to
desperate measures -- including even suicide.