But... it's a REALLY big number!!!
I've recently joined DKos after almost a year of lurking. My thanks to kos and all of you who contribute diaries, comments, and other resources to this fantastic laboratory space. Early on in my lurking, I came across several references to Modern Money Theory (MMT) that piqued my interest, and set me on a new journey of learning.
I am not an economist, but after months of study, I am convinced that MMT provides an accurate description of the nature of modern fiat currency.
I'm equally convinced that in understanding this nature, we can create much more meaningful and effective strategies to make market economies better serve the needs of the people.
This, my first diary, will be a little MMT primer using Joan McCarter's diary "Senate passes unemployment insurance extension" as a jumping off point. Joan quotes #WGDB, from which I'll focus on this snippet:
House action is uncertain at best. Speaker John A. Boehner, R-Ohio, has said repeatedly the Senate bill does not meet his test of creating jobs and being fiscally responsible.
Creating jobs? Of course it creates jobs. Government spending always creates jobs.
Sometimes it creates them directly: We pay contractors to build roads and bridges, they hire workers. BAM! New jobs!
Sometimes it creates them indirectly: We send out SSI checks, recipients go buy stuff, stores hire employees to ring them up and restock the shelves, vendors hire workers to make more stuff. BAM! New jobs!
While some types of spending create fewer jobs than others, the only way spending could fail to create any jobs is if there were no unemployed job seekers out there. In that case, workers could only move from one job to another, probably (but not always) leading to inflation, but no net creation of jobs. Of course, there have been plenty of unemployed for the last 40 years, so it has been a while since this problem could have come up.
Until we reach full employment, government spending CREATES jobs.
Carry on below the fold for a discussion of the real meaning of fiscal responsibility.
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