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This is a common economic fallacy. "A job guarantee (JG) is an economic policy proposal aimed at providing a sustainable solution to the dual problems of infla
by nonidentified 9y ago
This is a common economic fallacy.
"A job guarantee (JG) is an economic policy proposal aimed at providing a sustainable solution to the dual problems of inflation and unemployment." However, it is economic consensus that inflation is caused by government monetary policy (the "monetarist" view). It is also economic consensus that inflation is destructive and creates unemployment. So if government policy is creating inflation, and therefore unemployment, why would a government "job guarantee" be a sensible response? More alcohol doesn't sober a drunk man; more intervention doesn't balance an economy.
As the article correctly notes, "When inflationary expectations subside, [unemployed] people will get their jobs back." So isn't the most sensible solution to have the government stop inflating the currency? That would solve the "dual problems" without introducing a third. It would also be a fair and honest thing to do. After all, inflation is the government's way of raising revenue by cheating (it's "the hidden tax").
As a side note, it amazes me these antique economic fallacies consistently appear on HN, of all places. They are worse than nonsense, they're dangerous. When practiced, they really hurt people. Yes, they might help a few people - but they hurt far more than they help, and for far longer. Consider the government make-work programs during the Great Depression, which are now credited for dragging out that misery. Please, enough with the junk economics. There are far more fruitful government policy discussions to occupy intelligent minds - increasing efficiency, reducing deficits and debt, fighting corruption, stopping war, to name a few.
Source: Two degrees in economics.
- hliyan 9y agoI'm OP. I posted this because I discovered this with relation to an article I read about MMT, and wanted to understand exactly what you explained, from a person with your qualifications. Your response would have been so much better had it not contained the judgmental side-note. I think debating and dismissing old bad ideas is something that every generation needs to do, lest they reinvent it. My personal belief is that if we stop inflation, it will eliminate the pressure for continuous "growth", because money can now be a store of wealth that no longer leaks value and therefore there will no longer be a need for continuous investment. Perhaps the pace of society can slow down and people can relax. What would your expert opinion on that be?
- late2part 9y agoI feel your own response to the response would have been so much better had it not contained the judgmental opinion.
- simula67 9y agoIs there a Hacker News for those interested in economics ?
- maxerickson 9y agoInflation has been pretty dead for 35 years. Would that period have been worse for the working class if inflation had been higher?
- Y_Y 9y agoYour idea is interesting, but there are plenty of justifications given for governments setting positive inflation targets. Assuming they can control e.g. public sector wages and export competitiveness by another means, how do you prevent people being disincentived to spend or borrow money?
- nine_k 9y agoHave you considered that people (1) need and want to consume and (2) want to invest into things that bring in more money, and/or other goods? Forcing people to consume and invest, because else the money will expire, leads to mindless consumption, reckless unwise investment, and the lack of safety nets provided by savings.
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- tinymollusk 9y agoWhen you say economic consensus, do you mean there are testable predictions based on the consensus that have been shown to be reproducible in multiple real world experiments? Lots of economics seems to me like it's models that appear to work but don't generate testable predictions that turn out to be accurate.
- deleted 9y ago[deleted]
- Retra 9y ago>So if government policy is creating inflation, and therefore unemployment, why would a government "job guarantee" be a sensible response? More alcohol doesn't sober a drunk man; more intervention doesn't balance an economy. What is the argument you're making here? That if one particular policy causes a problem, then every policy will cause problems?
- neilwilson 9y agoTwo degrees in economics is equivalent to a bishopric isn't it. Don't think it actually means any actual knowledge. The world collapsed ten years ago due to these beliefs. Stop repeating them as though they are actual science. They are not. You wasted your time.
- crdoconnor 9y ago>Consider the government make-work programs during the Great Depression, which are now credited for dragging out that misery. The thing that amuses me about this is that you've probably flown through LAX or LaGuardia and driven across the Triborough bridge. But sure, "make work". >Source: Two degrees in economics. It seems to bear a striking resemblance to theology these days.