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What the Country Needs Is a New New Deal

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Posted on Sep 8, 2011
AP / Gregory Bull

By L. Randall Wray and Stephanie Kelton

(Page 2)

When it comes to the health and welfare of a nation, there is no economic policy that is more important than job creation. And yet decades of experience, in nations across the globe, provide ample evidence that while the private sector plays an important role, it cannot by itself provide employment for all who want to work.

There is a way to do that: The government could serve as the “employer of last resort” under a job guarantee program modeled on the WPA (the Works Progress Administration, in existence from 1935 to 1943 after being renamed the Work Projects Administration in 1939) and the CCC (Civilian Conservation Corps, 1933-1942). The program would offer a job to any American who was ready and willing to work at the federal minimum wage, plus legislated benefits. No time limits. No means testing. No minimum education or skill requirements.

The program would operate like a buffer stock, absorbing and releasing workers during the economy’s natural boom-and-bust cycles. In a boom, employers would recruit workers out of the program; in a slump the safety net would allow those who had lost their jobs to continue to work to preserve good habits, making them easier to re-employ when activity picked up. The program would also take those whose education, training or job experience was initially inadequate to obtain work outside the program, enhancing their employability through on-the-job training. Work records would be maintained for all program participants and would be available for potential employers. Unemployment offices could be converted to employment offices, to match workers with jobs in the program, and to help private and public employers recruit workers.

Funding for the job guarantee program must come from the federal government—and the wage should be periodically adjusted to reflect changes in the cost of living and to allow workers to share in rising national productivity so that real living standards would rise—but the administration and operation of the program should be decentralized to the state and local level. Registered not-for-profit organizations could propose projects for approval by responsible offices designated within each of the states and U.S. territories as well as the District of Columbia. Then the proposals should be submitted to the federal office for final approval and funding. To ensure transparency and accountability, the Labor Department should maintain a website providing details on all projects submitted, all projects approved and all projects started.

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To avoid simple “make-work” employment, project proposals could be evaluated on the following criteria: (a) value to the community; (b) value to the participants; (c) likelihood of successful implementation of project; (d) contribution to preparing workers for employment outside the program.

The program would take workers as they were and where they were, with jobs designed so that they could be performed by workers with the education and training they already had, but it would strive to improve the education and skills of all workers as they participated in the program. Proposals would come from every community in America, to employ workers in every community. Project proposals should include provisions for part-time work and other flexible arrangements for workers who need them, including but not restricted to flexible arrangements for parents of young children.

In truth, the $300 billion the president might propose Thursday is more than enough to jump-start our economy if it is really targeted to job creation. We can estimate the total program cost at $20,000 per worker, times 15 million workers. That adds up to a $300 billion gross cost, less savings on unemployment compensation (roughly $150 billion), welfare and food stamps, as well as the social cost of depression, divorce, abuse and crime. A direct job creation program modeled on the New Deal’s WPA could create 15 million jobs for less than $300 billion net spending, while also providing the infrastructure and public services required to bring our nation into the 21st century.

And because the job guarantee is designed not to compete with other employment options, the program would not result in the bidding up of wages (and prices) as workers were absorbed into the buffer stock. This is because the job guarantee program would hire only those that the market was not yet ready to employ. Because the program would not intensity competition for workers, it would not lead to wage-push inflation. It would, however, help to stabilize output and employment by establishing a floor on wages.

The program should be permanent, offering a good job at a basic wage to anyone who wants to work. With recovery, the number of jobs required in the program would quickly shrink, as the private sector would ramp up hiring as sales to consumers rise.

By keeping the program in place even once the economy recovered, we’d ensure continuous full employment, with the job program acting as a “buffer stock” that absorbed workers laid off when the private sector contracted and as an employment recruitment pool when private sector hiring resumed. In this way, full employment is maintained through the thick and thin of the business cycle.

Only jobs will create the infrastructure we need to compete in the 21st century. Further, Americans have never embraced welfare. For better or worse, our nation has always preferred a more libertarian path: self-help, personal responsibility, individual initiative. As a result, our welfare programs have always been stingy, temporary and purposely demeaning. They are not designed to reduce insecurity—while they relieve the worst of the suffering, those receiving handouts are supposed to quickly get back into the workforce, to pull themselves up by their own bootstraps. But they cannot do that when the nation is 20 million jobs short.

And we cannot restore the security needed to turn around expectations, to get the sales the private sector needs, with anything less than a nationwide universal jobs program.

The $300 billion investment in a direct jobs program would be the best way to prove that President Obama is committed to resolving the jobs crisis.

L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City. Stephanie Kelton is an associate professor at the University of Missouri-Kansas City and a research scholar at the Levy Economics Institute in New York. Follow them on Twitter @deficitowl


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Anarcissie's avatar

By Anarcissie, September 13, 2011 at 5:26 pm Link to this comment

Anon, September 12 at 12:33 pm:

No I wasn’t joking. If you can print money, you can cause inflation, but you can’t really be in debt. Debt for a country with a sovereign currency is irrelevant. ...

Not really.  No one has to take your paper.  Or rather, no foreigners have to take it, which is usually where those closing in on the drain are looking for help.

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By Gabriel, September 13, 2011 at 12:33 am Link to this comment

@ Marian Griffith
“All other countries in the world have a central bank that is part of the government.”

Outright bullshit!

MOST and close to all central banks are private corporations who answer to their investors, the real owners of everything. Those investors are usually hidden by many layers of anonymity.

Go check the records and documents.

If you’d bothered to check you would see that ALL major corporations talk to each other and are controlled by same Elite idiots.

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By Anon, September 12, 2011 at 12:33 pm Link to this comment
(Unregistered commenter)

No I wasn’t joking. If you can print money, you can cause inflation, but you can’t really be in debt. Debt for a country with a sovereign currency is irrelevant. But the folks at UMKC can speak to this much better than I.

The point is, if society so allowed, the Fed could start companies, e.g., an electric car co., print money to pay the workers initially, then collect the sales. In such a system, taxes would become unnecessary. We essentially did this in WWII.

Ideally, we would have an industrial policy to put everyone to work at high value added, sustainable (let’s go crazy) environmentally friendly jobs.

As for as finance, as others have said before (an FT contributor, during the worst part of the crisis), it should be a public utility. A way to safeguard deposits and make loans. Period.

The economy is too important to leave to business people. I don’t see the point in vilifying them, they are just a certain animal that can only do one thing: maximize profit. This implies loving the consumer and hating the employee and so the markets they so love. Until we decide to change some of the basic rules of the game, they won’t be stopped.

Of course one of their best techniques at retaining power is dividing us. I think the time for discussion is over. We have to find a common platform to vote on. Then vote on it.

As voters, we can tell the government to start highly automated industries. Provide for high tech housing. We can guide the economy but still let markets work where appropriate and let businesses do what they are good at.

The Fed has already loaned trillions of printed dollars to the wrong people (per the first and likely last audit of the Fed) at 0 or near 0 interest. As voters, we can demand they do the same to the right businesses (e.g., why not loan Tesla billions to produce a 30k electric car, then build the necessary infrastructure to make it work… this approach worked well during WWII).

I’m under no illusions of the odds of something like this getting of the ground, and even if it does, some twit like William Jennings Bryant might come along and high jack it.

But it seems the alternative is very frightening. As many point out, we’re likely headed toward a depression. I’m not sure americans will play as nice this time around.

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By Marian Griffith, September 12, 2011 at 1:18 am Link to this comment
(Unregistered commenter)

@Cliff Carson
—-I am not sure what your position is.  Do you agree that the IFC exists?  If you do, you may be saying that people don’t believe me or Stiglitz who used to be a big shot in the organization or a multitude of others who describe the IFC because they are stupid or because they think Occams razor doesn’t allow for a complicated scheme.

If on the other hand you don’t believe it exists, can you give me some evidence why you think it does not?  I don’t mean gut feeling, I mean solid hard evidence like for example proving that the Federal Reserve and the Central Banks are not Private Companies Independent of U S control?  And that the same scheme doesn’t exist in the other Nations of the world.—-

I can not prove a negative so no, it is logically impossible to prove that this cartel you postulate does not exist.

That said, we may have different ideas about what this cartel of yours entails.
If you mean that the number of men involved at the highest levels of wealth, finance and multinationals is small enough that they know each other directly or indirectly through ones they do know then yes, that much is patently obvious.
If on the other hand you mean that they regularly meet to discuss how to take over the world then no, I would apply Occam’s Razor to that theory. Just as identical technical or biological problems lead to highly similar technical or biological solutions, so do the people who run the trillion dollar businesses develop a similar mindset (and since it is such a tiny group they teach this behaviour to their successors and immediate subordinates) and will react in a similar way in similar situations (which really is the same situation as these men operate on a global scale).
They are the royalty of the emerging global finance driven economy (what is likened here to the medieval feudal system, even though that is only a partial fit to the new one), and like the kings of old they may squabble and on occasion go to war with each other, but at the heart they share the same values and conditioned behaviour and on strength of that alone they will appear to act in a coordinated fashion, when in reality it is just emergent behaviour (we marvel at the ‘intelligence’ of a termite colony for the same reason).

And in truth, I think that only in the USA the federal reserve is a private company. All other countries in the world have a central bank that is part of the government. Independent to a necessary degree the way judges are as well, but its top is appointed by government and it supports government policies. The fact that the fed is a commercial operation is not necessarily a bad thing. The German central bank was near autonomous and the ECB is modelled along those lines and that independence has kept the EC functioning this past year while the politicians who would control it are dithering and blathering. As long as the fed has a clear mandate what it must and must not do and a method exists to ensure it does not operate outside its mandate.
Also, even if things are problatic or even wrong in the USA, that does not make it an -international- cartel. Despite its delusions of grandeur, the USA is not yet the center of the universe around which everything revolves.

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By Anarcissie, September 11, 2011 at 3:00 pm Link to this comment

Capitalism isn’t a conspiracy.  It’s pretty much overt, and technically most capitalist practices are not literally criminal.  Capitalists can usually pay to have governments or mafias do any necessary dirty work.

As for stupidity and malice, I’d say they run neck-and-neck a lot of the time.  And they’re hard to distinguish.

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By Cliff Carson, September 11, 2011 at 2:20 pm Link to this comment

Mariam

I am not sure what your position is.  Do you agree that the IFC exists?  If you do, you may be saying that people don’t believe me or Stiglitz who used to be a big shot in the organization or a multitude of others who describe the IFC because they are stupid or because they think Occams razor doesn’t allow for a complicated scheme.

If on the other hand you don’t believe it exists, can you give me some evidence why you think it does not?  I don’t mean gut feeling, I mean solid hard evidence like for example proving that the Federal Reserve and the Central Banks are not Private Companies Independent of U S control?  And that the same scheme doesn’t exist in the other Nations of the world.

We can discuss it from there once I know what yor position is.

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By Marian Griffith, September 11, 2011 at 11:40 am Link to this comment
(Unregistered commenter)

@Cliff Carson e.a.

There are two common sense rules to apply when judging any bit of information you hear.
First is to not prescribe to malice which can be equally be explained by stupidity.
Second is that if there are several theories then the one that requires the least additional assumptions is likely to be the right one.

Now apply those two to the theory that there is a vast global conspiracy and you would be able to understand why your belief there is a financial cabal out there to impoverish and enslave us is generally going ignored.
Selfish shortsighted greed can equally explain the way the rich behave, thus meeting both conditions of being the more likely explanation of what is happening.

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By Amon Drool, September 11, 2011 at 9:07 am Link to this comment

lafayette: “.... Nothing indicates, for the moment,
that either program will be curtailed. What the Reps
want is for a Dem-POTUS to cut these budgets.”

well, imo, a demPOTUS has already taken the first
steps to cut social security.  in late 2010, obama
proposed, to the repubs surprise, to cut the
employee’s contribution to SS by a little over 2%
(this amounted to a 16% reduction in total
employee/employer contributions)  this 16% is now
being made up through general tax revenues and gov’t
borrowing.  the repubs figured that if the dems ever
tried to put back the employee contribution to what
it was pre-2010, all they will have to do is scream
TAX INCREASE.  the repubs gladly said YEAH to obama’s
offer and now, when the american public eventually
realizes that interest payments on the debt have
become too onerous, that 16% of SS now funded through
general revenues/gov’t borrowing will be on the
chopping block.

i do realize one could see the payroll tax cut as a
needed way to get money into the economy because of
repub obstinacy when it comes to fiscal stimulus and
taxing the rich.  but when one looks at obama’s
appointments to the ‘catfood’ commission, one gets
the sense that he doesn’t have a problem with cutting
social security.

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By Marian Griffith, September 11, 2011 at 3:52 am Link to this comment
(Unregistered commenter)

@adam2
—1. The government is already trillions of dollars in debt and no, it cannot afford it.

2. What the government spends comes from taxpayers and those suffering exported inflation, because the government does not actually produce anything. It merely redistributes and ineffeciently at that.

3. Every single penny spent on government workers or schemes is effectively being sucked out and away from the productive side of the economy.—

Three (common) misconceptions here.
1- A government can always go deeper into debt. It does have severe medium and long term disadvantages, but it may be necessary in the short term. It is arguable that we still -have- banks because governments throughout the world went trillions into debt to prevent a total collapse (or maybe not but I do agre that the chance it would not be that bad was not one we should have been taken).
The medium term consequences of that debt are now surfacing, and being dealt with poorly (if at all) because no country is prepared to balance the easily going into debt with the much harder paying it back (i.e. draining the excess money out of the economy again before it can turn into inflation).
If Obama needs a trillion dollar for his economic plans he can simply instruct the central bank to add that much money. The bankers (unless they are die-hard chicago school neocons) there will then politely inform him that doing so without showing how this money will be paid back in short order will wreck the economy, but using that trillion dollar to provide 10 million americans with a job for a few years is likely to go a long way to repay that loan.

2- Actually, what government does is act as a national insurance company for risks that are too vast, or too infrequen, for commercial companies to deal with AND as unifying force when commercial interest would be too destructive.
You wouldn’t want police to be a commercial service, nor would you want companies to ensure the safety of a nuclear reactor. Building the dikes along the missisipi river is necessary but impossible to pay for by any county or even state (and it takes only one county that doesn’t keep up and the whole thing is meaningless). You probably would not be happy if you had to pay toll for every little dirt road and every bridge (and there would not be all that many bridges if that were the case as those things are expensive and the owner would not want competition). You probably will agree that a ‘judge for hire’ is a very bad idea.
And on a deeper level you probably won’t think of how bad it would be if the government had not forced the whole country to adopt one type of electricity socket, the same voltage everywhere, standardised wiring and so on. The banking system that we are all so reviling also makes it possible to deposit money in New York and withdraw it in San Francisco, and to travel anywhere in the country and being able to pay for things (with roughly equal prices to boot). You don’t have to exchange your money at every state, county or city border. Then there is the whole issue of safety standards. Planes falling out of the sky or buildings collapsing are rare in the USA, but so common in Russia and China respectively that it is barely commented on anymore. The food from the stores is not spiked with poisonous additives and when it happens it is import from countries without a strong government.
All this is just a tiny fraction of all those essential services that are performed by governments and paid for by taxes. Have a good long look at Somalia or Congo to see what a country without taxes looks like.

3- as explained above those government workers do a lot of things that are vital to our health and welbeing but are not very visible. And all those salaries means they have a house, purchase goods and through that contribute no less to the economy than any other worker.

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Lafayette's avatar

By Lafayette, September 11, 2011 at 3:23 am Link to this comment

HARAKIRI

CC: Now that the Political Parties have spent our funds into a shortage with no way to pay the collected money back, our sweet Government wants to keep the spent funds and not honor their end of the bargain.

Yet more drivel. Nothing indicates, for the moment, that either program will be curtailed.

What the Reps want is for a Dem-PotUS to cut these budgets. A Rep-PotUS would not be so insane.

To do so is tantamount to political harakiri with the American public, who may be politically naive but they are not idiots.

Can’t anyone see through the machinations of the Crazies in Congress?

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By Gabriel, September 10, 2011 at 11:26 pm Link to this comment

@ Cliff
Nice, short, sweet, full of truth and states the basic root. smile
And I’ll keep your suggestion in mind.

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By Cliff Carson, September 10, 2011 at 9:42 pm Link to this comment

Gabriel

I have given Lafayette links, etc. to read about the Cabal, but he simply ignores them because he knows what he wants the truth to be, and therefore he does not want to be confused by facts.

I don’t think Lafayette is dumb or un-knowing, and I do think he knows that the IFC is real.  Why he chooses to spout his drivel about the International Financial Cabal is locked away in his Psyche.

Be kind to him.  He is harmless.

I have put the following on a couple of threads before to give him a starting point.  I would ask him to google Stiglitz, Qigley, Rothschild, and B.I.S. as starting points actually.

Here is what I copied and pasted for him to read:

“Dr. Carroll Quigley, a Professor of History at Georgetown University, where he was President Bill Clinton’s mentor, was an insider of the World Financial Cabal, groomed by the powerful clique he called “the international bankers.” 
He wrote:
“The powers of financial capitalism had a far reaching aim, nothing less than to create a world system of financial control, in private hands, able to dominate the political system of each country and the economy of the world as a whole.  This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.  The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank Group owned and controlled by the world’s central banks which were themselves private corporations.”
The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government.  The statement echoed one made in the eighteenth century by the patriarch of what would become the most powerful banking dynasty in the world.  Mayer Amschel Bauer Rothschild famously said in 1791:
“Allow me to issue and control a nation’s currency, and I care not who makes its laws.”

The Federal Bank System in the United States is a part of that Conglomerate Private Corporation and it sets the U S Money policy and supply, outside the control of the United States Government.  It is Independent from direction of our Government.

This same scenario is repeated in almost every Nation in the World.  I think there are seven Nations left in this world that are not run by this Conglomerate. 

Libya used to be one, but one of the first things the Rebels set up in Benghazi was a Central Bank (part of the Conglomerate).  For that kindness their revolt was financed by this Conglomerate.

The price was that the Conglomerate would run their Monetary policy.  The war loans come thru the IMF.  The Cabal wants to privatize the Libyan water and oil reserves as a beginning.

Have you noticed that most of the Rebel Leaders have been identified as World Criminals (by the U S and NATO) long before the Libyan War?

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By Anarcissie, September 10, 2011 at 6:02 pm Link to this comment

Amon Drool, September 10 at 9:26 am:

‘i do have a quibbles with you, though.  you seem to
think that we should have kept social security in its
compound interest-producing lockbox.  isn’t compound
interest a form of exponential growth?  and isn’t any
form of exponential growth danger on a finite planet? ...’

I took this to mean ‘within the usual context of contemporary capitalism’ part of whose delusional framework is the delusion of unending expansion.  As long as the ruling class is going to preserve and promote this delusion, one might think it ought to play by its own professed rules, instead of looting the ‘lockbox’.  Of course the r.c. actually has many ways of looting many lockboxes belonging to the people and each other and practices them regularly.  That’s why they’re rich and powerful and you’re not.

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Gabriel's avatar

By Gabriel, September 10, 2011 at 4:08 pm Link to this comment

@ Lafayette

“There is no more criminality in International Finance than any other industrial sector.”

That’s outright bullshit sir. If only the Mafia could be so lucky as to have their setup and such a rip-off scam.

“You are being confused by the volume of transactions that take place? Or the personalities? Or the fact that IF is all over the Nightly News. So, of course, IT MUST BE IMPORTANT. And, therefore, almost certainly it must be corrupt, corruptible or corrupted.”

What’s on the news is not even 1% of the scam. You need to go back to deals and treaties made from the time of Columbus with the British, French, Spanish, Portuguese, East India Company and others.

It is YOU who needs to “Get a compass, you are lost.”

“No doubt, money has influence in politics ... but all this “garbage” about manipulating governments is beyond belief. One can “influence some politicians” who peddle their favors but Finance does not dictate to whole governments - except in a Banana Republic.”

It IS and Always has been about Money and STEALING resources. Get it right.

“Or in the vivid imagination of someone writing scenarios for Hollywood. In that regard, you are all in orbit around some planet ... but it is not the Earth.”

It is YOU, Lafayette, who should look at the actual documents ... that are freely available to the public at the Library of Congress and places mentioned.

Let’s call it what it really is:
It’s the biggest scam in the history of Earth. It’s Genocide on a global scale. It’s Fraud, Extortion, Theft, a pyramid scheme by those already mentioned.
It’s Super Mafia on Steroids.

It’s estimated they [Super Mafia] killed over 15 Billion men women and children in their quest for power and greed. This is clearly visible as the wars and takeovers continue. Their own records say they are about to try eliminating 99% of men and women soon, if they can get away with it.

They have also poisoned most of this planet with Chemicals, Nuclear waste, GMO products, Pharmaceuticals, tobacco, and the biggest one of all Crude Oil and products. Everything they do is destructive to this planet ... EVERYTHING, no matter how nice it seems.

Anyone who comes on here and says otherwise is a shill working for that Super Mafia or is so Dumb they can’t see what’s blatantly going on around them.

So which one are you Lafayette?

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By Cliff Carson, September 10, 2011 at 1:45 pm Link to this comment

Amon Drool

I must apologize for leaving the impression that I thought we should have left the collected funds of Social Security and Medicare in a lock box.

What I was trying to say is that the Government, well actually the Republican Party, has been trying to do away with SS and Medicare for years.

The money collected for these two programs should have been used for these two programs.  And nothing else.  The reason is that these programs were a bargain with the people.  One in which the people had no choice whether to join or not to join.

Now that the Political Parties have spent our funds into a shortage with no way to pay the collected money back, our sweet Government wants to keep the spent funds and not honor their end of the bargain.

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Lafayette's avatar

By Lafayette, September 10, 2011 at 11:06 am Link to this comment

CC: You are absolutely correct about the core criminality of International Financial corruption.

There is no more criminality in International Finance than any other industrial sector.

You are being confused by the volume of transactions that take place? Or the personalities? Or the fact that IF is all over the Nightly News. So, of course, IT MUST BE IMPORTANT. And, therefore, almost certainly it must be corrupt, corruptible or corrupted.

Get a compass, you are lost.

No doubt, money has influence in politics ... but all this “garbage” about manipulating governments is beyond belief. One can “influence some politicians” who peddle their favors but Finance does not dictate to whole governments - except in a Banana Republic.

Or in the vivid imagination of someone writing scenarios for Hollywood. In that regard, you are all in orbit around some planet ... but it is not the Earth.

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By Amon Drool, September 10, 2011 at 9:26 am Link to this comment

cliff carson…i appreciate your posts on this
thread. 

i do have a quibbles with you, though.  you seem to
think that we should have kept social security in its
compound interest-producing lockbox.  isn’t compound
interest a form of exponential growth?  and isn’t any
form of exponential growth danger on a finite planet?

also, wouldn’t squirreling away a huge sum of moolah
in a lockbox interrupt ‘flow’ in a monetary system? 
wouldn’t sequestering such a large amount just give
parasitic bankers (using fractional reserve leverage) 
the opportunity to create the needed money through
interest-bearing debt?

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Gabriel's avatar

By Gabriel, September 10, 2011 at 8:56 am Link to this comment

@Cliff Carson

Oh I caught on to Lafayette a long time go. It only took reading a few of his comments. I just added ammunition to the fire, that’s all. wink

I also notice how any good info gets quickly buried by nonsense comments .. or at least they try.

“D.R. Zing” and few others are famous for it:
http://www.truthdig.com/report/item/how_little_we_know_about_the_origins_of_9_11_20110908/#425792

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By Anarcissie, September 10, 2011 at 8:17 am Link to this comment

Sixteen tons, and what do you get?
Another day older and deeper in debt.
Saint Peter, don’tcha call me, ‘cause I can’t go,
I owe my soul to the company sto’.

  (http://en.wikipedia.org/wiki/Sixteen_Tons)

And then there’s the problem of interest….

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By Cliff Carson, September 10, 2011 at 8:09 am Link to this comment

Gabriel

Yes you are right about B.I.S., the World Bank, IMF , Central Banks and yes our Privately owned, unanswerable to the United States people, Federal Reserve.

I have written a mountain of stuff about that World Financial Cabal, the Rothschild Influence, the fact that their biggest money maker is promoting and funding wars, and forcing “Offers you cannot refuse”  on nations to get control of their Financial and Political wherewithal.

I was just conversing with Lafayette about the consequence of debt.

Lafayette has admonished me about the International Financial Cabal in the past.  He says that conspiracy is just a fairy tale, and that is why I didn’t mention the IFC, his subject was about Debt difference, etc.

You are absolutely correct about the core criminality of International Financial corruption.

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By Gabriel, September 10, 2011 at 7:56 am Link to this comment

@Cliff Carson

You missed the most corrupt of them all ... the Federal Reserve, whom answers to European Monarchy and their bankers, mainly the British branch, and blatantly steals from ALL Americans.

Now why is it that you omit this and the fact that it’s been going on since the colonization of Americas?

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By Cliff Carson, September 10, 2011 at 7:00 am Link to this comment

Lafayette

I agree that debt is not a problem given two things:

1.  The USA has the ability to pay it without harm to the citizen.

2.  There is a shared positive value gained from taking on that debt.  Shared means that the citizen of the State gains and equally shares that value.

Personal Debt is different from State debt.  No argument there as long as conditions 1 & 2 above are kept inviolate.  Unfortunately Lafayette what happens in a State where Special Interests have control of the Government, is that those Special Interests will incur debt to the State that profits themselves inordinately and push the repayment to the citizen which then takes precedent over the citizens personal debt.  Witness what is going on right here, right now, for the past 30 years give or take, in the good ole USA.

That kind of debt does harm the citizen but not the Special Interest crowd.

The wars you mentioned have cost Trillions as you rightly pointed out. But only the few profited, the rest of the peons were delivered the bill.

Social Security is under attack by the Republican Party.  You may have noticed that the Media has been playing up the Republican spokesmen description of Social Security as a “Ponzi” scheme.  Ever hear of anything so absurd?

But it is being presented as a revelation by the Republican Party as a foul Socialist Program that has been stealing from the American people. 

The actuality is that an admitted $2.5 Trillion of Social Security funds has been stolen from the American people = by the Government!  I figure that amount to be closer to six Trillion Dollars stolen from the likes of you and me.  No wonder that Social Security and Medicare are facing money problems.  The Special Interests have stolen it.

That stolen money went to fuel illicit Wars, Bailouts to banks, both Foreign and Domestic, Subsidies to Big Business Corporations, Earmarks, and bridges to nowhere.

The Few Powerful and privileged got the goodies, the many poor and downtrodden got the bill.

So while properly managed debt(Remember 1&2) is an OK thing, what is being dumped on the American Citizen is nothing short of criminal.

Criminals belong in prison.

We need to reform our Government and put the criminals where they belong.

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By Gabriel, September 10, 2011 at 5:40 am Link to this comment

300 Billion is chump change in comparison to what the super-rich already stole ... from YOU the people. Over 28 Trillion in last few years, that’s with a capitol T ... and let’s not forget the lives lost, families and homes destroyed, personal property stolen, land destroyed, food poisoned and much more.

And the Roots of the problems are:

1. as long as there’s a Federal Reserve, a private non American entity who answers to British interests, there will be no Just system. It produces paper money with interest/debt included ... this is called Usury and punishable by death by all previous cultures.

Solutions: make them pay ALL that they stole and send them to prison / slave labour camps. If this one thing is done 99% of all your problems would go away by default.
Every government must print their own money free of debt to stay solvent. No if’s or but’s about it.

2. Business is in it for profits. It doesn’t care about your well being, kids, food, or whether you are too sick to work. It will steal anything and everything it can. It will kill you at every chance it gets ... there’s lots more dumb or desperate people who will fill the jobs. Their system is designed that way.

Solutions: use jobs only to get yourself setup as a independent operator = a Sovereign.

If you must get a job Demand fair wages ... minimum of 50 dollars per hr. ... and Demand there’s is a powerful Union of your choice.

If you are going to do any operation then everyone must be getting paid the same, have same share of profits. It doesn’t matter what position you hold in the operation. Everyone has equal input into how it’s run. These are the only companies that are surviving and thriving in any kind of economy.
You don’t want anyone that’s greedy, teach them or kick them out.

Create communities where big business and multinationals are not allowed, can’t compete and will fail. Keep it local to better your community.

Create your own community money. 1 hour of work = 1 greenback
If you need to exchange: 1 greenback = 100 dollars

Help each other. Did I say HELP EACH OTHER? This can’t be repeated enough.
Big business was declared War on you ... all of you.
They rule by divide and conquer. Don’t let them. Boycott any business that tries ... they don’t last too long without profits.

Never buy junk. If it won’t last more than 10 yrs then it’s not worth it. Demand better.

Practice “permaculture”: it let’s your community become self sufficient and reclaims polluted, destroyed or desert land.
It’s quite simple: your “compost” is your best friend, and whole setup can be easy as: http://gardenpool.org

Create your own energy and electricity: There are many ways, Search them out.
... composting [over 3 Million Chinese farmers are using them to power their farms], Pantone/Geet uses your old car engine, helical wind turbine, solar oven, magnet motor, Tesla tower and 100’s more.

When properly done Pantone/Geet will dispose of any pollution short of nuclear waste.

Recycle: you can recycle just about anything if you put your mind to it. One man’s trash is norther’s gold.

Learn and never stop learning.

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By Lafayette, September 10, 2011 at 12:55 am Link to this comment

A GUNS-OR-BUTTER MOMENT

CC: ... from my perspective, when you print money, you print a form of IOU.  Therefore one sure way to go into debt is to print and issue money.

And still, debt is not that great a problem.

Americans who tend to think that the rules that apply to “their household debt” are those that apply to “Uncle Sam’s debt” have got it quite wrong. Such is NOT the case for nations.

The case for nations is summed up in this well-known adage.

If I owe you a hundred dollars, that’s my problem. If I owe you million dollars, that’s YOUR problem.

In fact, Sovereign Debt means debt that is held by a creditor, not debt that is owed by the debtor. Countries that trade heavily with the US, prefer (over other alternatives) to hold our dollars (in the from of Treasury-notes) and receive interest in the form of debt maintenance payments. 

Our debt level, at about 65% of GDP (which is a common metric in the matter) is higher than many countries, but is not as high as those in the Deep Debt Doodoo. It is a debt that is manageable; with difficulty, yes, but still manageable.

However, to the Treasury the debt represents a large amount of interest maintenance. The interest must be paid periodically - and when a country does not make scheduled payments, its “rating” goes down which means payments go up. A country literally digs itself into a “debt hole”.

The difference therefore between Household Debt and National Debt is that, as regards the former, household assets are seized to extinguish the debt. As regards the latter, such seizure is not possible. But paying more is possible.

Our debt level is sustainable - but it would be a lot more easily sustained were the level at half the current percentage of GDP. With the same level of taxation, the nation could arrange its finances to fund other options that better the lives of its citizens.

MY POINT

The country is facing what economists call a “Guns or Butter Moment”, where alternatives must be chosen.

Do we spend our money on maintaining a large and highly sophisticated Defense/Homeland Security Industry? Or do we wish to pursue other alternatives that:
* Create jobs, or
* Better the lives of our citizens. For instance more Social Investments that provide a higher standard of living or well-being.

But we withdraw from becoming the world’s policeman and we accept a higher internal risk of terror.

Put another way: Are our priorities right when so many people are unemployed? In the circumstance when debt is high, but unemployment is high as well, two consequences related to debt-maintenance happen:
* TAXES MUST RISE to enhance Treasury revenues and,
* The “Golden Rule” is instituted by countries. (All government expenditures must be counterbalanced by equivalent government revenues - which means taxes of all sorts.)

The above are happening around the globe. Germany has instituted the Golden Rule along with Spain and Italy. France is about to do so.

There is, however, a notable exception to that rule - a country spoiled by the notion that “Taxes Must Not Rise!” (But a past president can piss a one/two trillion dollars down the hole in a country called Iraq.)

Somethin’s gotta give …

TIME TO PAY THE PIPER

In that country, a political party insists that taxes on the rich must not rise . Why? Because the rich are not just ordinary people. They are a privileged class.

So, from where must the tax revenue come? From those least able to pay because either (1) they are unemployed, or (2) they got used to a lifestyle by which they were living quite beyond their means. And they are substantially debt-prone in maintaining that standard of living.

Regardless of who, someone must pay the Piper.

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By Anarcissie, September 9, 2011 at 8:28 pm Link to this comment

Following the Social Democratic model, the German government reduced unemployment by encouraging industries where there was a risk of layoffs to go to a 6-hour work day.  Pay was reduced, but it’s usually better to have less money than no money, plus you get some time to do what you want instead of look for a non-existent job.

‘We’, that is, the government, in the United States, could never do this, but it’s a pleasant fantasy.

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By Cliff Carson, September 9, 2011 at 7:10 pm Link to this comment

GradyLeeHoward

I would go if I could.  I have an invalid wife and I am her provider.  I really do wish I could go.  While she was still in good health I was busy with my Grandchildren and they now come and visit my wife something she truly lives for.

Now that I have Great-Grands I can see what I wish for my Great Grands Children.  My hope is that America will recover from its criminal leaders and become a beacon for all mankind.

You asked me what and all I can say is go, get there, speak up. All voices raised for the good of our future may some day be remembered in American History as the Great Transformation from vile to great.

Repeat that excellent de Tocqueville quote President Eisenhower repeated “America is Great because America Good, if America ever ceases to be Good, America will cease to be Great”.

We are in danger of bringing truth to his quote.

I believe in the American People.  I believe somehow we will find our way before it is too late. 

People who make those trips and participate are those who most likely can effect change.  I can only write something that hopefully might give encouragement to those who can go.

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By Lafayette, September 9, 2011 at 6:09 pm Link to this comment

HOW TAXES BECOME GOODNESS

Adam2: What the government spends comes from taxpayers and those suffering exported inflation, because the government does not actually produce anything. It merely redistributes and ineffeciently at that.

The above sort of nonsense cries out for a rebuttal.

It has been orthodox economic policy, since the 1930s, that when an economy begins to demonstrate high unemployment and weak job creation it is the Government that must employ Stimulus Spending in order to jump-start the economy. Time and time again, governmental stimulus spending has accomplished the objective of creating jobs, when used wisely.

The spending adds to the economic cycle by boosting production, which increases consumer Disposable Income, which is the motor of the economy. Enhanced Demand is what finally creates an expansion of production and ensuing employment creation.

The comment above demonstrates the ignorance of many as regards a Government’s role and responsibility towards the economy. Complaining about taxes is mindless nonsense, unless those taxes are used to waste money.

[Many would argue that DoD-budgets are one such boondoggle of great waste and should be trimmed drastically.]

ABOUT TAXES

First of all, America has some of the lowest tax schedules of any developed country.

Secondly, tax revenues have a benefit in terms of augmented well-being when spent properly. Actually, they do more to enhance our standard-of-living than if those tax revenues went directly to the consumer.

TWO EXAMPLES

* European national HC systems deliver world-class health care universally to all its citizens, subsidized by both payroll tax and income tax revenues. And it performs that service at a far lower cost per person than does America’s HC practice.
* Postsecondary education is almost free in Europe and thus a larger proportion of students move from secondary to postsecondary training, either vocational, college or university. Which allows them to be prepared with a skill-set when ultimately looking for a job. Aside from the fact of making them generally more intelligent citizens.

MY POINT

It is only the credulous who believe that “free markets” can provide all the services that a nation needs. In some market sectors, due to their nature and/or priority, a Public Service offering is far more effective.

European countries have become adept at such Mixed Economies.

But for as long as Americans think that such expenditures on Public Services is “Socialism” (and therefore the Devil’s Handiwork), it cannot benefit in terms of a higher standard of living.

And it is taxes that finance those Public Services.

A TWOFER

All America needs to do is (1) trim much useless national spending whilst also (2) increasing tax revenues (by closing loopholes and raising taxes on much higher incomes).

Which will allow for (3) a job-creating expansion of Public Services that increase the well-being generally of its citizens. And, in this manner, the country would finally, after 230 years, address its glaring problem of Income Disparity.

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By GradyLeeHoward, September 9, 2011 at 3:16 pm Link to this comment

Cliff, should I go to DC Oct. 6 on Amtrak or will
Michael Cavlan RN just start bossing me around with a
bullhorn, making me feel like I’m already in “the
Camps.”

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By GradyLeeHoward, September 9, 2011 at 2:49 pm Link to this comment
(Unregistered commenter)

Cliff Carson is worried rightly about cheaper
imported labor on infrastructure projects (usually
highways). In all 50 states it is undocumented
Hispanics and new immigrants we see in the dirt piles
and open ditches . How would a homeboy work with a
Spanish speaking crew, and the racist abuse they
endure? But I have bigger eyes than Barack, more like
the Missouri professors. There are many jobs in a
variety of fields not now being performed that could
advance and help our country.

Now as for changing Oligarch diapers I am trying to
get my wife Gladiola to let me go (or come along) to
that DC occupation on Oct. 6. I won’t tolerate RN
Michael Cavlan bossing me around with a bullhorn but
I do need to hear some in person opinions up
close.It’s not like I’ll swap hand germs with Moyers
and Hedges or pinch Barbara Ehrenreich’s bony hip. I
need to talk to people who are not MSM newsworthy to
determine if redemocracy has any chance. Even here in
waterlogged NJ with out big round stingy governor
people are deluded and angry. I want to hear some
thinkers speil it out. Cliff, do you think I should
ride the Amtrak down to DC that Friday?

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By litlpeep, September 9, 2011 at 1:53 pm Link to this comment

It is profoundly true, and has been restated too many times to count, that: “The $300 billion investment in a direct jobs program would be the best way to prove that President Obama is committed to resolving the jobs crisis.”

In order for Obama to follow that tried and true theory, he would have to understand two things apparently beyond his grasp: relevant historical experience (in this case, the Great Depression), and macro economic theory.  Not only does he not grasp either of these, he apparently has no one in his cabinet who does.

So it is not correct to say he could do this if he wanted to.  He would want to if he knew his re-election hinges on getting this jobs thing right.  He is advised to get it wrong, and trusts his advisers more than a chorus of historians, political theorists, economic theorists, and the vast majority of the voters.

I no longer even wish him good luck.  The Tea Party would if they understood just how much his policies are their policies.

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By Cliff Carson, September 9, 2011 at 1:49 pm Link to this comment

GradyLeeHoward

What can’t be outsourced is the infrastructure built in the United States.  However, the labor force can be outsourced and the workers brought in from across the waters.

You and I would have to pay for those workers.

While our brothers and sisters would only wish they had a job.

We need to do something about our Government.

If we still can.

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By GradyLeeHoward, September 9, 2011 at 12:15 pm Link to this comment

Well, $7.50 an hour is chump change but everyone
claims “sumthin is better than nuttin.” After 99
weeks on 2/3 pay or less something’s gotta give I
suppose. I wonder if they’re gonna screen all those
warm bodies and drug test: I could take a piece of
that action.

In a recent survey those most opposed to a higher
minimum wage clustered in the group earning just
above that minimum. They didn’t want those fifty
cents below to catch up and overtake their exalted
status. Maybe that is the profile of the non-psyops
conservatives writing in support of Oligarchy.
Explains some things, doesn’t it?

“hoi polloi” is a Greek idiom denoting the masses;
the common people, and yet in our culturally twisted
society it has come to mean the careless wealthy.
Maybe the confusion was instigated when a clergyman
like Martin Luther King suggested that the misery of
some is really the misery of all. I’ll repost another
author to illustrate:By SoTexGuy, September 8 at 5:10
am Link to this comment
Applicable quotes:

“If a man doesn’t have a job or an income, he has
neither life nor liberty nor the possibility for the
pursuit of happiness. He merely exists.”

“Oh America, how often have you taken necessities
from the masses to give luxuries to the classes… God
never intended for one group of people to live in
superfluous inordinate wealth, while others live in
abject deadening poverty.”

“A nation that continues year after year to spend
more money on military defense than on programs of
social uplift,” he said, “is approaching spiritual
death.”

“We need to be concerned that the potential of the
individual is not wasted,” he wrote. “New forms of
work that enhance the social good will have to be
devised for those for whom traditional jobs are not
available.”

The above by Dr. Martin Luther King Jr.


I’m 55 and working but disabled. There was a time in
the 1980s though when I’d have liked working
government projects at minimum wages with a few
benefits. I had toothaches and was gathering
cardboard to sell to but peanut butter and bread.
Most of you have never lived in a rusty schoolbus or
toileted in a trash can like I did for a year, and I
was a recent college graduate. I know I would have
feared association with underclass ruffians, and I
know classism is prevalent in its cruelties in the
United States, but at least I would have had an
address and some shoes when October came. Maybe I
wouldn’t be alive today if smeone hadn’t used me as
an example and submitted my plight to Arlen Specter.
He is devious but he helped me get a real job, and
I’ll be always appreciative.

Anyway I think some sort of rebuilding and service
jobs program is desperately needed regardless of
economic tallies and ideologies. If you were lost on
the high seas and you found a wrecked boat would you
be reluctant to consume the food and water inside
because it might belong to some rich vindictive
bastard? Hell no you wouldn’t! These are times of
emergency with a big part of our workforce lost on
the high seas. Commandeer that bitch and change the
name. Sail her for all you’re worth. Even a dingy is
better than the drink. Only a dolt would refuse
workers that.

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By Cliff Carson, September 9, 2011 at 11:16 am Link to this comment

Anon

“If you can print money, you can’t be in debt”.

I’m not sure if you are joking or not.  But from my perspective, when you print money, you print a form of IOU.  Therefore one sure way to go into debt is to print and issue money.

“If you print money and increase goods and services simultaneously, you won’t get (much) inflation”.

The truth of this statement depends on whether or not the goods and services generate enough income to cover the cost of producing and marketing those goods and services, plus the the cost of holding your debt from the printing your money, and the cost of the debt that the purchaser owes on his buying of your goods and services.

And if you ship jobs overseas, you will be trying to sell your products to people who no longer have jobs and can’t afford to buy.  That’s when a Corporation can go to their bought Government and have it force the taxpayers to cover the loss.  Like GE for example.  Look up their transfer of jobs to China - after they were bailed out by the taxpayer and didn’t pay any Corporate Income Tax.

who’syourdebs,

You are certainly correct as far as you go.  What is not said enough publicly is that when you outsource low wage jobs permanently, you actually cause the death knell for the higher wage jobs that made possible those low wage jobs.  There is a symbiotic relationship among all jobs right up through the top of the pyramid including the entrepreneur.

This point seems to either get missed or is skipped purposefully.  For example lets look at the factory line worker, say a minimum wage employee.

These $7.50 employees making widgets get replaced by workers in the Dominican Republic who get paid 29 cents per hour for their labor.

That factory in the U S is no longer needed, therefore no longer needed are the Maintenance people, the Shipping and receiving people, the Engineers, the Designers, the Accountants, Salesmen, Computer Technicians,the Facility Management personnel, and the Materials Suppliers and all their workers, almost surely over time there will be no United States worker left, except those that might get transferred to a foreign country. And over time even they will be phased out.  The stockholders and the Corporate Management may be able to choose where they want to live.

I remember George Bush proclaiming that it was good for America to outsource jobs to Foreign Countries.

The Political Parties and their hireling Media will bombard you unmercifully 24/7 how it is the American peoples fault that the Corporation “has to outsource to be profitable”.

But you might notice that the worse it gets on the American Worker, the bigger profits the “American” Corporations seem to build.

This country needs to reform its Government and neither the Democrats nor Republicans are going to do it as long as you keep drinking the Kool-aid.

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By Anon, September 9, 2011 at 8:26 am Link to this comment
(Unregistered commenter)

If you can print money, you can’t be in debt.

If you print money and increase goods and services simultaneously, you won’t get (much) inflation.

E.g.s: Prussia(18th cent), Japan(19th cent), US WWII; China?

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By who'syourdebs, September 9, 2011 at 7:30 am Link to this comment

With automation, population growth, and so many jobs going to cheaper labor markets in other countries, it seems inevitable that there will come a time when we’ll have many more citizens capable of working than there are fundamentally essential jobs to employ them. I’ve seen a few articles on the news blogs just recently with this theme. Maybe those jobs are gone for good. Maybe this is just of beginning of “the Big Layoff”. Will we pay people to do nothing? Will we replace essential work with make-work? Send them to man daycare centers, visit the elderly in nursing homes? Let them write novels? Something’s gotta give. The idea in the article suggesting a permanent WPA was a revelation. Barring class warfare, therein lies the future.

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By Cliff Carson, September 9, 2011 at 7:27 am Link to this comment

Anarcissie

I agree.  In my opinion the powers that be are playing a calculated game of chicken.

They know that the people could blow up into violent reform at any time, reform that might turn their wealth into nothing but ashes.

But being well versed in the probabilities of that happening based on the very high probability of the masses inability to come together in a cohesive group with an urgency of purpose, they see themselves very likely to be able to continue to rob, rape, and appropriate the wealth of the people into the forseeable future.

Therefore they are not inclined to see any need to listen to the cries of the people for the simple reason that the only thing the people seem inclined to do is cry.

So they think no change is necessary.

While the people seem to think no change is possible.

So any progress toward reform will require the mind change of two different classes.

The exploiters and the exploited.

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By Anarcissie, September 9, 2011 at 6:53 am Link to this comment

I think people are going to have to grasp the fact that capitalism doesn’t work, at least not the way they want it to, and that patching here and there isn’t going to change that fact.  It is true that it can be fitted out with social democratic bells and whistles, but these are offensive to capitalism’s main practitioners and, when they can, they get rid of them.  That is what has happened over the last thirty years, with predictable results.  The response of the Right has also been predictable: an ever more determined march into an illusion of the past.  If proggies want to counter this they are going to have to quit mousing around and start talking about socialism and anarchism.  It was not niceness that got the ruling class to consent to Welfare; it was fear of socialism.

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By Cliff Carson, September 9, 2011 at 6:47 am Link to this comment

Populism does live and the people of America do desire change - but I’m not sure that we really want change bad enough to go for it.

“Progress is impossible without change, and those who cannot change their minds cannot change anything.”    George Bernard Shaw

The people of America need to change their minds about America’s Political System but don’t seem ready to do anything about it.

Or is it that the American people don’t know what to do to reform the system?

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By Frosty46, September 9, 2011 at 2:25 am Link to this comment

WEll Obama’s speach was one fine wet dream for the Republicans—another direct hit on Social Security, tax cuts for all, and total ball licking good results for the reichwingers—————-bow wow!

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By Adam2, September 9, 2011 at 1:24 am Link to this comment

“The new jobs can only come from the federal government—the only economic entity that can afford to hire.”

1. The government is already trillions of dollars in debt and no, it cannot afford it.

2. What the government spends comes from taxpayers and those suffering exported inflation, because the government does not actually produce anything. It merely redistributes and ineffeciently at that.

3. Every single penny spent on government workers or schemes is effectively being sucked out and away from the productive side of the economy.


The author is quite correct to say that the original “new deal” actually left the nation worse off for over 7 years. The problem is said author seems to presume the fact nation eventually recovered was due to said new deal? Why?

Compare it to the depression before the Great Depression.

With THAT depression the government didn’t do much of anything, meaning the free market made a rapid recovery, so rapid you’ve probably never heard of that depression.

The one where the government DID dive and and do that new deal thing is today referred to as The Great Depression - because the new deal delayed any chance of recovery for years!

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By cpb, September 8, 2011 at 11:09 pm Link to this comment

I just realised that I have contradicted myself in my previous post.  I was defending American populism and at the same time expressing pessimism in “any significant American populism rising…”.

I take that back, it wasn’t what I meant to say.  The populism is there, as I outlined in the prior post.  It is overlooked, overshadowed, ignored, attacked, or manipulated to other ends.

I am not pessimistic about American populism, I am defending such.  I am pessimistic about any short or medium term success of that populism, based on my understanding of the forces aligned against it.  I have faith however that those forces, ultimately, wil be unsuccessful, based on my faith in the populism itself.  I would like to think better of our short and medium term collective future.  If only…

And the story continues…

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By cpb, September 8, 2011 at 10:55 pm Link to this comment

@ MrFreeze

Appreciate the thoughtful and respectful (so unfortunately rare) reply.  I am going to challenge you again, with similar respect.

Let me start where you ended.

“I don’t entirely disagree with you about there being some sense of populism out there in the U.S.. The trouble is that we’ve become a nation so sheepishly devoted to our corporate masters that we’ve forgotten how to be populists.”

Yes.  I agreee.  Bang on.  The question left hanging; by what means? 

Continuing…

“..some fairly obvious trends in the U.S.:”

“1) Organized Labour has shrunk to historic lows (something like 7% of the total workforce). If there ever was a measure of populism it would be the labour movement.”

I can’t comment on the specific statistic, but it jives with my impression of the situation.  Again, by what means?  That organised labour has been under steady attack for decades should not require a substantive argument at this point.  The record is clear. 

“2) Just try and use the terms “shared-sacrifice,” frugality or “working-together” in public and you’ll find yourself being accused of being either insane or a socialist (sticks and stones….sticks and stones)”

Ok, so, in lighter terms; tell me something I don’t already know.  The ‘zeitgeist’ is the holy grail of those that seek to control and determine public opinion.  We can’t hope to fully explore this is a blog exchange but my position, in summary, is simply that you are merely detailing the result, which speaks nothing whatsoever to the actions and motivations which bring said result about.  I believe you are correct about the result, but you speak nadda to how? or why?  The ‘Manufacture of Consent’ isn’t a conspiracy theory.


“3) We are no longer “citizens.” We are consumers. The measure of our society/country isn’t measured in our voting levels, our community involvement…no, our measure has become “70% of our economy is driven by consumer spending” and that’s pretty much the measure of all things.”

Again, tell me something I don’t already know.  The conversion from citizen to consumer was an act of intent.  The end result works really well too, from certain perspectives.


What I take from your analysis is a pessimistic outlook on the prospects for any significant American populism rising to overcome the injustices and challenges presented by the current status quo, anytime soon.

I agree.  I am similarly pessimistic. 

But don’t doubt for a moment that justice is more than a concept developed academically and better left for those with a (controlled) education in philosophy, law or poli-sci. 

Sense of justice is a human trait, one that can be fooled, but not erased.

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By anon, September 8, 2011 at 10:14 pm Link to this comment
(Unregistered commenter)

We already have this program.  No skills, education, or experience required.  The largest welfare program in the nation, the military.

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By El_Pinguino, September 8, 2011 at 9:59 pm Link to this comment

Oh BOY! Lets prime the pump!

But first….. check to be sure there is some water in the well… ok peeps?

Another supply side solution. Another epic fail.

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By mrfreeze, September 8, 2011 at 9:32 pm Link to this comment

cpb - I’d like to defend my position about a lack of populism by pointing out some fairly obvious trends in the U.S.:

1) Organized Labour has shrunk to historic lows (something like 7% of the total workforce). If there ever was a measure of populism it would be the labour movement.
2) Just try and use the terms “shared-sacrifice,” frugality or “working-together” in public and you’ll find yourself being accused of being either insane or a socialist (sticks and stones….sticks and stones)
3) We are no longer “citizens.” We are consumers. The measure of our society/country isn’t measured in our voting levels, our community involvement…no, our measure has become “70% of our economy is driven by consumer spending” and that’s pretty much the measure of all things.

I don’t entirely disagree with you about there being some sense of populism out there in the U.S.. The trouble is that we’ve become a nation so sheepishly devoted to our corporate masters that we’ve forgotten how to be populists.

Is there an “app” for that on my I-phone????

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By SAANVI, September 8, 2011 at 8:40 pm Link to this comment
(Unregistered commenter)

let’s extend the two year vacation millions have had
on unemployment,......... now that’s incentive!

http://funnyandspicy.com

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By Morpheus, September 8, 2011 at 7:35 pm Link to this comment

I guess you haven’t heard. This is the new deal. A lot of it comes from republicans.

Memo to America: Stop waiting for Democrats and Republicans to save you. It’s bad for your health and your future. Can’t you tell?

“WAKE UP PEOPLE!” 
Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )

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By radson, September 8, 2011 at 6:25 pm Link to this comment

Lafayette:Which planet do you inhabit ;when are are you going to join us here on Planet Earth?What the hell is this BULLSHIT line that you’re preaching ;yes the one -that you blame -everything -on the poor bastards ,that don’t understand what’s transpiring
politically.I don’t think that YOU know what the hell is going on yourself.So keep your JUNK firmly clasped in your own hand .

cheers

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By Lafayette, September 8, 2011 at 5:59 pm Link to this comment

NEW DEAL2

Consumers will not spend more until they’ve got more jobs.

Interesting treatise, but flawed. The above statement is wrong.

Right after the Credit Mechanism Seizure in the fall of 2008, Americans went off the deep end. That is, after binging on Cheap Credit for five years, they finally realized that they had been spending way, way beyond their means. (Yes, all that spending created or sustained jobs.)

They had built for themselves - based upon realty equity cash that re-mortgaging unloosened based upon bubble pricing - an enormous Debt Hangover. The bubble burst, but Americans were stuck with Credit-debt that they were obliged to repay.

So, they went into a spending deep-freeze whilst they paid of that debt overhang. In fact, some are still paying it off because the bank charges are so high they would be considered usurious in other countries.

We are now three years beyond that point. Why aren’t Americans spending? In part, yes, there is 9% of the work-force unemployed, which means about 4 to 5% more than our long-term rate of unemployment. But the other part, which is far more significant, is that those who have jobs - and they are a far greater number than those who don’t - are not spending.

These are the consumers who typically sustain the economic vigor of our country. What are they waiting for? For what can be called the Feel-Good-Factor - that is, the attitude that tomorrow will not bring a double-dip recession (and it wont) that will cause further unemployment.

That “information” has yet to change mind sets, however. One day, though, the information will work its way through to loosen wallets.

When? Well, since economists screwed up so badly predicting the Great Recession of 2009, it is understandable that they are wary of predicting when this one will finally be over.

MY POINT

Typically these recessions last 4/5 years, depending upon their magnitude - and this one was a whopper. Still, next year is the fourth year beyond the fall of 2008 when the Whole Mess started.

Employed Consumers will spend much more when Feel-Good-Factor returns. When’s that?

We can hope for an accelerated improvement next year. That should reduce unemployment perhaps to the 6% level and 5% in 2013.

POST SCRIPTUM

But the amount of New Deal2 money that would be necessary is not $300B, but closer to $750B. And not even God Almighty will get that out of this Congress - where tax hikes are anathema.

A rise in tax revenues could do the trick. But that aint gonna happin - and we all know why. Some Crazies that WE, THE SHEEPLE, VOTED INTO THE HofR.

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By Mike, September 8, 2011 at 4:38 pm Link to this comment
(Unregistered commenter)

I actually agree with this article. Rather than trying
to create producers, instead let’s create consumers.

But, unfortunately, I also agree with some of the
commenters. In today’s political climate, a government
jobs program such as this would probably be labeled a
“government takeover” and “socialism”, and there’s very
little chance Congress would pass it.

We’ll have to file this under “Good ideas that will
never happen due to political games.”

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By jonf, September 8, 2011 at 3:30 pm Link to this comment

This is a neat idea but I think it will not go anywhere. The popoular notion will be that we should not be taking jobs away from private business, even though they may not be spending anything. At least in infrastructure we might be better served paying directly for a project as opposed to hiring workers at lower than the prevailing wage. Same idea would apply to any job that is ordinarily handled in the private sector. Bottom line is this will be seen as socialist or worse.

It does seem that the professors were trying to fix the problem on the cheap without considering the backlash from those who oppose taking jobs out of the private sector. So maybe there is more to this, but until then….

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By cpb, September 8, 2011 at 3:05 pm Link to this comment

@ MrFreeze

“There isn’t a populist chromosome in most Americans
today.”

I agree with the sentiment of your post but I take issue
with this idea.  A characteristic can be repressed in a
population, but not as easily bred out.

I’ve often thought that so many of the ‘real people’
within the Tea Party movement (as opposed to the
funders, orchestrators and beneficiaries) are pretty
darned genuine, and have some genuine concerns to boot. 
But the ‘conservative’ movement on a broader scale was
hijacked long ago, by the larger interests that have the
grassroots believing that ‘Freedom’, and ‘not spending
more than you earn’ as ideas, inexorably lead to
Reagonomics trickle-down, Free Trade, goodness in the
eyes of Jesus, tax/regulation cutting etc.. 

Seen for what it is, this is wool over the eyes. And
there’s a lot of investment in that wool.  I think it is
unfair to judge the blinded, overlooking the qualities
of the wool that blinds.

Populism is far from dead in America, it’s just being
led around by the nose in most cases, and oppressed
where it does appear, and sometimes violently.  All the
while, whenever it appears, and in whatever form, it is
almost entirely ignored by MSM.

There is nothing special about Americans, nothing.  And
neither with their sense of justice.  The level of
manipulation of that justice however, in America, is
truly in a class of its’ own.

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By jonf, September 8, 2011 at 2:54 pm Link to this comment

The reason there is so much money on the side line is b/c there are no sales. You must have sales to sell something to invest in it. You will not build a new plant or spend money when not enough are buying your product. The money on the sidelines will stay on the sidelines until there are more sales.

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By mrfreeze, September 8, 2011 at 2:18 pm Link to this comment

Here’s the problem:

Even if FDR was resurrected in his totality, with all his personal strengths, his wisdom, etc.; and even if he could be on Fox News (and all the other Media outlets 24/7 every nano-second of the day & night…...........EVEN IF this happened tomorrow, THERE WILL BE NO NEW DEAL or anything like it….Why?

BECAUSE AMERICANS EMBRACE THE WEALTHY today no the poor and underclasses as they did during the last Great Depression. Americans have become self-serving automatons through years of conditioning by our materialistic society. Americans today are NOT POPULISTS. There isn’t a populist chromosome in most Americans today. FDR couldn’t sell his ideas because Americans would be too busy pretending that they are going to become one of the top 5% (if only their taxes were low enough, their jobs fancy enough and the government didn’t exist….).

We are living in very different times my friends. Don Peck speaks of this “change in values” in his book Pinched and I think he’s absolutely correct.

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By MD, September 8, 2011 at 2:11 pm Link to this comment
(Unregistered commenter)

They need to do things they will never do, starting with trade tariffs, the Buy
America law passed in 1935 would do us some good, raise the top marginal tax
rate, etc.  All of this will never, ever happen. Washington is bought and paid for,
they do enough to ward off a revolution.

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By Samson, September 8, 2011 at 1:39 pm Link to this comment

In general, ‘crowding out’ of businesses is EXACTLY
the New Deal we need.

We’ve seen an extreme of making everything pro-
business, of making everything rely on the private-
market, of saying that Greed Is Good.  That’s the
root of the problems we are having today.

In our public space, the exact thing we need to do is
to start ‘crowding out’ businesses whereever we can. 
After all, ‘business’ has been ‘crowding out’ the
rest of us for decades now.  That’s why most of us
are hurting so badly right now.

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By Samson, September 8, 2011 at 1:35 pm Link to this comment

We’ve previously been through this before.  In the
1930’s, we saw Hoover try a bankers-first economic
policy to respond to the Great Depression.  Hoover’s
basic idea was to give all the money to the bankers
and hope that creates a job or two.  FDR ran in 1932
on a specific platform of reversing that policy and
using the money and power of the federal government
to create jobs for real people.

Obama is following Herbert Hoover’s policy. Obama’s
administration was put into office with wall street
money, and Obama chose to stock it full to the brim
with wall street bankers.  As such, its not really a
surprise that Obama is giving us a replay of Herbert
Hoover’s economic remedies to the Great Depression.

We know what works.  We know an FDR style jobs plan,
and general New Deal for the people—as opposed to
our current Old Deal which is one where everyone gets
screwed by the corporations 24/7—is the answer to
our problems.

The mistake many seem to make is that since they
kinda remember from school that FDR was a Democrat,
that therefore electing the Democrats again will give
us the same solution. The problem is that the
Democrats and Obama have long since sold out to the
Wall Street bankers, therefore, the modern equation
is clearly….

Obama = Hoover

The sad thing is that this generation’s FDR is
missing in action. There’s no challenge to
Hoover/Obama from the left this time around. No
primary challenge to Hoover/Obama. No sign of any
politicians to the left of Hoover/Obama willing to
run as independents. 

Yes, we need a New Deal.  But, just like in 1932, in
order to get it we need to throw the bankers and
their bought politicians out on their ears to be
willing to get it.  2012 is fast approaching. We need
to do this in 2012.  But, does anyone see it
happening?

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By Bird48, September 8, 2011 at 1:06 pm Link to this comment

It seems to me that the secret to making government jobs actually worthwhile is to leave out the private sector. When stimulus money is handed over to a state to fix a bridge then the first thing they do is hire a private contractor to do the job. He then hires workers, buys materials and eventually fixes the bridge; however a good deal of the money is put in his pocket as profit.

Certainly there is a contractor out there who could be hired directly by the government at a decent salary and proceed to hire unemployed construction workers paid directly by the government and get the job done without having to siphon off a profit.

Stop treating the private sector as the only worthwhile job market and a lot more could get done for a lot less money.

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By Textynn, September 8, 2011 at 12:32 pm Link to this comment
(Unregistered commenter)

More money to “job creators”.  That will do
nothing.  The supposed “job crators” have more
money than God and it is doing nothing for the economy.

I simply can’t understand a government turning a
blind eye to the fact that most jobs offer low
wages and no benefits and then acting like we
should easily buy or have employer provided health
care when the entire country is designed to conduct
business in a way that denies people care and
continual access.

Can you imagine what people would do with their
money if they had Single payer and knew they would
always have care and keep their homes. The economy
would double in a month.

This whole country is a scam arrangement and
Americans are providing the rich with mega wealth
by allowing the have mores to deny health care
assess.  Dying and losing property to the elite is
big business.  The death business of our own people
is what America is really about and Obama is
helping them do it.

More epa regulations ditched. Of course, poison
people and deny them care without a huge ransom and
then grab their property for the little help they
get.

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By jonf, September 8, 2011 at 12:31 pm Link to this comment

Sounds like a good idea, but there appear to be a few problems. A local contractor could feel the Feds were taking business away from them, as would the local employees of the business. The local government would like it since it would reduce their costs and would want to give more to the feds. So isn’t that a “crowding out” of private business? And if the wages paid were less than the prevailing wage rate, employees of local business would be resentful.

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By Amon Drool, September 8, 2011 at 12:14 pm Link to this comment

good to see Truthdig adding Modern Monetary
Theorists(MMT) wray and kelton to the conversation. 
i’ve been trying to get a handle on MMT for some time
now.  it seems to emphasize the keynsenian concept of
gov’t doing what it has to do to keep demand somehow
balanced with production.  and on a certain narrow
‘economic’ level, MMT makes sense to me.  but some
questions do arise.

since a ton of production has been outsourced to
cheaper labor markets, won’t fiscal stimulus
primarily benefit the chinese? (i’m all for public
improvements in infrastructure, but don’t we have to
produce something to put that infrastructure to use?)

wray’s and kelton’s emphasis on job production
eventually leading to increases aggregate demand
seems reasonable, but doesn’t more efficient (from
the pov of cost) technological development/automation
force us to look differently on ‘jobs’ as being the
key way to sustain demand?

i do have other questions about MMT but am unable to
formulate them right now.  if there are any MMT’ers
out there, could you allay my concerns or just, in
general, enlighten me?

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By curlygirl, September 8, 2011 at 10:47 am Link to this comment
(Unregistered commenter)

For an eye-opening and extremely provocative movie about a global movement by ordinary people click on the following link.

http://youtu.be/4Z9WVZddH9w

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By cpb, September 8, 2011 at 10:26 am Link to this comment

Lots of armchair economists as usual, and I don’t mean
that with any mean spirit.  But I do think that most
posters, as well as the author, have missed connecting
this to some larger issues.

We need a paradigm shift of some kinds.  What that would
involve I’m sure many on this thread could make
interesting points about, but debating how we “get back
to” such and such a time period, or level of employment,
or debt level etc.. is not going to get us anywhere.

We cannot continue living in an economy that demands
growth.  We cannot continue living in an economy that
operates on one base motivation alone.  This is not
sustainable in a finite environment.  And let us not
overlook the extent to which those “good old days” were
had on the backs of others, foreign and domestic.

“It’s the Economy Stupid!”

Yes, it is the economy.  The “economy” that we have, by
it’s very nature, is killing the planet, and a lot of us
at the same time (if not all of us eventually).

I don’t know what the ultimate solution is but I believe
there are lots of thoughts and ideas out there.  The
discussion needs to change however, if we’re ever going
to dig our way through this quagmire and realise a
tomorrow that is possible, sustainable, and fair. 

Remember fairness, that universal notion that all but
the genuinely psychopathic of children understand??,
before we grew up and became jaded because dominant
culture insisted that Might was Right and fuck everyone
else…

Looking for opportunities for overlap between
traditional economic realities and a new paradigm, with
the understanding that we only move forward from the
position we are in, I would support the ideas of
Entropy:

DEREGULATE…from the BOTTOM UP.
END WELFARE…from the TOP DOWN.

Makes a lot of sense to me.  Fairness, a starting point,
and direction. 

Peace.

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By JLR, September 8, 2011 at 9:56 am Link to this comment
(Unregistered commenter)

This is great article.

The virulence of the idiot right-wingers responses shows that it has hit a chord.  This is
the only thing that would truly work right now, in the real world of 2011 that we’re living
in - though I agree that the minimum-wage is awfully low, I think it should an adjusted
living wage for the region the worker is in (higher in NYC than Oklahoma).

Capitalism never really has full employment, there are always people sitting idle making
no contribution to society.

The right-wing trolls here a nothing more than advocates for the wealthy to remain with
99% of the pie

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By Matt, September 8, 2011 at 9:35 am Link to this comment
(Unregistered commenter)

@John M

Wasn’t there some kind of policy shift in 1937 that would provide some useful context to that Morgenthau quote?

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By John M, September 8, 2011 at 9:31 am Link to this comment

Could you imagine trying to build Hover dam as a jobs
program today? the environmental impact study and
resulting lawsuits would start construction in 2035 if
ever - shovel ready government programs don’t exist as
Obama already had a laugh about..

The government can’t move fast enough to have an effect
unless you are pumping money to the states to keep them
from laying off the people they over hired

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By entropy2, September 8, 2011 at 9:22 am Link to this comment

Shouldn’t have gotten my hopes up.

Sadly, just another mainstream left attempt to build a bigger, better bandaid. Aside from creating another clumsy and, inevitably, corrupt, top-down nightmare, it would simply shift dependency of us unwashed from the plutocratic side of the corporate-state to its technocratic-bureaucratic side. And, ultimately, dependency on any entity WILL result in abuse of power and exploitation. If you think that, maybe, this time we’ll find those, ever-elusive, honest and smart non-sociopaths to plan, execute and run this monstrosity, then you are living in a utopian dream world.

The liberal establishment is great at recognizing “macro”-level problems. Charts, indices and tables are mother’s milk for these people. What they don’t understand is that solutions need to come from the micro-level. Instead of perpetuating dependency and its attendent exploitation, how about fostering genuine, human-level, interdependence that responsively and responsibly fulfills individual needs AND builds strong communities?

DEREGULATE…from the BOTTOM UP.

Support individual and mutual entrepreneurship in tangible (and money-saving) ways. Review, revise, and/or eliminate zoning, licensing and code restrictions that bar micro-scale entry into markets and work only to “cartelize” industry, agriculture and commerce in the hands of the few. Keep regulations on big business in place (simply because they can do more damage and must be forced to be responsible and accountable.) But start letting the working class CREATE THEIR OWN JOBS. Let individuals build relationships of trust and mutual benefit at the local level. These are the building blocks of a civil and sustainable society.

At the same time, END WELFARE…from the TOP DOWN.

We subsidize big business in countless ways. From direct and indirect subsidies, to limited liability, to state-granted monopolies and rents, to taxpayer-supported infastructure and education, the government serves the corporate elite by creating artificial, unsustainable economies of scale. Again, review every subsidy, tax-break and public-funded project and program to see who really wins from it. Once we get the undeserving plutocrats off welfare, then we can check to see if there are any “undeserving poor.”

The left needs to grab the term “free market” and shove it up the a** of the corporate elite. Only when they are forced to compete both for workers AND customers will they be whipsawed into playing nice.

And guess what? It’ll be messy. You CANNOT create one big, perfect set of rules that will apply evenly, effectively and justly to 300 million indiivuduals. That takes trusting us proles to run our own lives.

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By RonP, September 8, 2011 at 9:20 am Link to this comment
(Unregistered commenter)

http://goo.gl/3ACsn
I’m not sure spending on infrastructure will have the desired impact if we hire the Chinese to do the work.

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By ElkoJohn, September 8, 2011 at 9:19 am Link to this comment

This is called the ‘‘Right to a Job’’ for everyone who wants to work.

This will NOT be embraced by either the Republican or Democratic leadership
because it is not ‘‘Trickle Down’’ economic capitalism.

The Democratic Party continues to advocate for the unemployed
to sit home for 99+ months—rather than for them to have a Right to a Job.

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By Chuck, September 8, 2011 at 9:17 am Link to this comment
(Unregistered commenter)

An obvious problem with this plan is its proposal to create jobs “at the federal minimum wage.”  The minimum wage is not adequate to meet basic living expenses.  It’s essentially a ticket to poverty.  So what would be the benefit of putting people to work for an unsustainable wage?  It would simply be another factor pulling down the wages of other workers.  Obviously the authors of this piece have never tried to support themselves or a family on a minimum wage salary.  If they had, I doubt they would be proposing that a minimum wage job is the answer to unemployment and the best way to revitalize the economy.

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By sofianitz, September 8, 2011 at 9:16 am Link to this comment
(Unregistered commenter)

$300 billion would be great, and alleviate a lot of human suffering, but four or five times that much would be required to reduce unemployment (U3) to “normal” 5-6 percent levels.
The author knows this.

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By Hasapiko, September 8, 2011 at 9:09 am Link to this comment

To those who oppose government spending programs like the New Deal I say: what is wrong with that? Our economy has suffered from poor investment by private capital - the housing bust or the dotcom bust - and poor investment by government - the unnecessary invasions of Iraq and Afghanistan. Both sectors exhibited an equal lack of intelligence and foresight that cost the economy trillions of dollars.

As long as government projects are productive, what is wrong with increasing the debt to pay for them? Was the Hoover Dam not a productive government effort? How about the TVA, etc? Every enterprise, government or private, borrows money to fund productive work. Private corporations borrow too.

Oh, and about the rising unemployment in 1937-39: that happened after a Tea Party-like Congress rolled back a lot of New Deal programs.

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By johnm, September 8, 2011 at 9:04 am Link to this comment

It would be nice if education could be considered as acceptable “work” for the
program.

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By thelonegunman, September 8, 2011 at 8:32 am Link to this comment

not if more than half are going to be in tax cuts they won’t…

tax cuts do NOT create jobs… the so-called ‘stimulus’ proved that…

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By Anarcissie, September 8, 2011 at 8:25 am Link to this comment

Maybe capitalism doesn’t work, even when being rejiggered by the government periodically?

Or rather, it works, but it doesn’t work the way most people want it to.  It’s highly dynamic, and each period of boom is followed by a period of depression or, more optimistically for those with deep pockets, ‘creative destruction’.  The foundations of great fortunes are laid in the bottom of a depression, but not for people who are living in their cars.

I don’t think $300 billion is going to do much; the money will flow to the roulette tables of the rich, and there it will disappear.  You will owe them, however.

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By Broll, September 8, 2011 at 8:24 am Link to this comment
(Unregistered commenter)

@John M - You missed the point as to why business isn’t hiring. Even if they have the $3 trillion “sitting on the sidelines” why would they spend those funds on salaries and benefits when they currently have low sales? You don’t gain customers because you have a lot of employees hanging around collecting paychecks. You gain customers when people walk into your business with money in their wallets.

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By John M, September 8, 2011 at 8:21 am Link to this comment

@ Left in LA

“I am not an accountant or an economist…SO WHY ARE
THE BAGGERS AGAINST THIS. IGNORANCE?... SEDITION?...
IS IT SIMPLE HATE FOR THE AMERICAN PEOPLE, THE
AMERICAN DREAM… OR IS IT THE DEEP SEATED RACISM THAT
MUST BE ROOTED OUT OF OUR GOVERNMENT AND OUR HEARTS”

Good thing your not an electrician either or you
would try plugging an extension cord into itself to
get power..

“We have tried spending money. We are spending more
than we have ever spent before and it does not work.”
Sound like, oh, Rep. John Boehner of Ohio or some
other exasperated Republican stalwart lamenting
proposals to spend our way out of the recession?
Listen again:
“I want to see this country prosperous. I want to see
people get a job. I want to see people get enough to
eat. We have never made good on our promises.”
Sound more like a liberal Democrat pushing job
creation — say, Harlem’s Rep. Charlie Rangel?
What about this:
“I say after eight years of this Administration we
have just as much unemployment as when we started. …
And an enormous debt to boot!”
Surely this must be House Speaker Nancy Pelosi or
another leading Democrat denouncing President Bush’s
economic policies.
Wrong. Wrong. And wrong again.
The words are those of none other than Henry
Morgenthau Jr. — close friend, lunch companion, loyal
secretary of the Treasury to President Franklin D.
Roosevelt — and key architect of FDR’s New Deal.
The date: May 9, 1939. The setting: Morgenthau’s
appearance in Washington before less influential
Democrats on the House Ways and Means Committee.
Morgenthau made this “startling confession,” as
historian Burton W. Folsom Jr. calls it, during the
seventh year of FDR’s New Deal programs to combat the
rampant unemployment of the Great Depression.
“In these words, Morgenthau summarized a decade of
disaster, especially during the years Roosevelt was
in power. Indeed average unemployment for the whole
year in 1939 would be higher than that in 1931, the
year before Roosevelt captured the presidency from
Herbert Hoover,”

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By John M, September 8, 2011 at 8:15 am Link to this comment

@ tdbach

“John M - the dolt is you. Yes, businesses have gobs
of money in their coffers, but they won’t - and
shouldn’t - spend it without some assurance of return
on their investment. If their markets are anemic, as
they are now, they sit on it. That’s the point.
Government is the only entity with the incentive to
take chances and the possibility of ROI even in a bad
economy (increased tax revenue, decreased safeety-net
outlays, another 30-60 years of infrastructure life).
Dolt.”

Sorry you missed my point - the authors said “the
ONLY economic entity that can AFFORD to hire is the
government”

I was only pointing out it’s not true, get a grip

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By Left in LA, September 8, 2011 at 8:15 am Link to this comment

I am not an accountant or an economist… but if I could think this through… where are all the Rocket Scientists that are in charge of this kind of stuff…
These are simple round numbers to cut through the double speak and economic voodoo…. Say the Government spends $1000 on an infrastructure project. That $1000 gets contracted to a private construction company to do the work.
15% for Profit - $150
35% for materials - $350
50% for Labor - $500
Lets start with the Materials…
first thing 10% Sales Tax goes to the State ($35)
$335 goes into the economy to buy the goods and materials
$200 cost of manufacturing materials
$100 Labor (pays 15% taxes - $15)
$35 Profits
Now $500 for Labor to do the work
First 15% Payroll Taxes to Fed ($75) plus another $25 for Income Tax - $100 TOTAL
The workers take their $400 and spend half on goods in the community and half on housing, utilities, etc…
10% Sales Tax on $200 ($20 to State)
$180 on Goods – Same basic thing as above… cost of goods ($100), labor to manufacture ($50), and profits ($30)
Finally the $150 Profit gets taxed at 20% ($30 to feds)
Really all we ever spent was $1000
Payroll - $650
Taxes to State - $55
Taxes to Feds - $140
Goods purchased inc. mfg. materials—$830
Profits (surely spent) - $215
Total Economic Stim - $1890 Because SPENDING churns the economic engine.
AFTER TAXES… MORE THAN A TWO-to-ONE RETURN ON INVESTMENT… AND it really only cost the taxpayer $860.
SO WHY ARE THE BAGGERS AGAINST THIS. IGNORANCE?... SEDITION?... IS IT SIMPLE HATE FOR THE AMERICAN PEOPLE, THE AMERICAN DREAM… OR IS IT THE DEEP SEATED RACISM THAT MUST BE ROOTED OUT OF OUR GOVERNMENT AND OUR HEARTS

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By ron hansing, September 8, 2011 at 8:13 am Link to this comment
(Unregistered commenter)

Do you know what profession makes the predictions of the weatherman’s look good?... answer: economists.

Even less predictive are economic professors.

It won’t work, first, 300 billion dollars is only 20,000 dollars per job, that’s ten dollars an hour.

Why work for ten dollars an hour when one can stay on unemployment forever. Collect free food, free medical care, and housing benefits.

Second, the 300 billion will only increase the debt… Oh yeah, lets tax the rich… but that will only cut more jobs.

We could increase the capital gains tax to 35%, this is double taxation of the earned dollar, and the stock markets will crash, and we all will lose 50% of our 401 K’s. Instead of investing in the USA, all the investments by the rich will go overseas where the capital gains tax is zero or near zero.

Recently I offered a neighborhood kid, 25 dollars to mow my lawn, which takes 45 minutes with my riding mower and he told me to take a hike. So much for my effort to help with the unemployment problem in my small way.

ron hansing 9.8.11

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By John M, September 8, 2011 at 8:11 am Link to this comment

@ bonito

“What makes you think that if We give even more
breaks to the Wealthy Corps. that they will use this
windfall to create more JOBS?  These same Corps. are
making record profits with the work force they
already have. And even if they were to hire more
employees, it would more than likely be in some
Foreign Country.”

Sorry you missed my point - the authors said “the
ONLY economic entity that can afford to hire is the
government”

I was only pointing out it’s not true, get a grip

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By Marian Griffith, September 8, 2011 at 8:09 am Link to this comment
(Unregistered commenter)

@John M
You apparently glossed over the two key observations in this article:
Business will not hire workers until they are able to sell.
People will not buy until they have a job.

It is patently obvious that companies have plenty of money to hire. The problem is that they will not do so because it would only destroy the company by raising cost without increasing revenue as a result.

The whole point is that the government is the only entity that can afford (though poorly so after sacrificing trillions of dollars on the altar of the golden calf) -hire employees at a loss-.
Which is what needs to happen to get out of the current hole the economy is in.

Trusting on the ‘big companies’ has proven to be futile. They first ask a billion dollar loan, then demand it to be turned into a gift, then ask for special priveleges so they can ‘cut cost and be competitive’ and then finally thank the government for its largesse by creating jobs overseas in china and vietnam and places like that.

The proposal laid out by mr. Wray is one of the ways that the worst excesses of capitalism can be blunted and provides a way to ensure that the boom-bust cycle that has been plaguing the american economy can be reduced. There are two problems with it though that I can see. One is that I have serious doubt that 25 million jobs can be found that are both meaningful and that do not compete with commercial business. The second is that this proposal requires incrrasing taxes. The higher taxes paid in European countries are to a large extent to provide a similar buffer against poverty and citizens dropping out of the economy entirely as we are seeing happening in the USA.
Of course a country pays for its unemployed one way or another. Either by giving them a job, or an unemployment benefit that is survivable, or through violence as people get desperate and even jail is seen as an improvement over their otherwise hopeless situation (and locking somebody up in jail for years is a lot more expensive than giving them a minimum wage unemployment benefit for the same time).

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By Bobv, September 8, 2011 at 8:07 am Link to this comment
(Unregistered commenter)

It is a little ridiculous to assume that zero unemployment is considered to be a desirable thing in the capitalist system, at least by those who endorse it. As we head further and further down the road into a hard line, market driven, unregulated capitalist system, endorsed by both the Republicans and Democrats (and here the Republicans are at least more honest) it will become even more important to allow the sometimes violent fluctuations of the market, as reflected through rising and subsiding waves of unemployment and poverty, to be dictated entirely by the market needs and not by the needs of the people most impacted by those fluctuating levels.

The language of the market, it needs and how it self-modifies and re-balances itself, is expressed largely through these fluctuations. It also seems important to re-assert again and again that, regardless of what Obama says about his wishes to create work and income for those who have been most effected, his actions are the language he uses to inform us of his preferences related to market needs vs. human needs. The less regulated or unregulated market serves those at the top of its pyramid and is assessed to be healthy when the wealth and access to resources of those at the top of its pyramid is unthreatened. It is designed to move resources, both the product of work and goods and services, in uninterrupted flow to the pinnacle to be distributed downward as availability lasts and does not interrupt access of those at the pinnacle.

The talk of unemployment and job creation in this way becomes largely propaganda to placate those who supply the work, goods and services so they will continue to supply and move the resources toward the pinnacle of the pyramid of capital. The pyramid requires and is sustained by various levels of unemployment and poverty, dependent upon the availability and access to resources and how thinly they can be spread toward the bottom of the pyramid without interruption to the supply to the pinnacle. In this way, If jobs are genuinely seen to be required it is only due to the perception or real events in the capital system that indicate that more jobs are needed to make sure the flow of capital and resources is unimpeded in its movement to the pinnacle.

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By tdbach, September 8, 2011 at 7:52 am Link to this comment

I completely agree - in spirit - with the authors. Their numbers are suspect, if for no other reason than they don’t account for the capital and material cost of the projects involved.

John M - the dolt is you. Yes, businesses have gobs of money in their coffers, but they won’t - and shouldn’t - spend it without some assurance of return on their investment. If their markets are anemic, as they are now, they sit on it. That’s the point. Government is the only entity with the incentive to take chances and the possibility of ROI even in a bad economy (increased tax revenue, decreased safeety-net outlays, another 30-60 years of infrastructure life). Dolt.

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By Hulk2008, September 8, 2011 at 7:50 am Link to this comment

The reason corporations are sitting on the sidelines is that their crop of MBAs have NO imagination at all - they have been trained to be specifically bottom-line focused rather than ingenuity focused.

One of the first activities companies sacrifice in a crisis is R&D - and that’s a false choice.  R&D feeds the future products and those products develop demand.
Once a company is selling all of their current products and has squeezed out all the available productivity, it needs to grow by developing new products.  Senior management, assisted by those supposedly trained in business admin (aka the MBAs), is supposed do that development - NOT hunker down in some bunker mentality.

Once upon a time our nation was literally defined by “Yankee ingenuity”.  There are too many companies who have shipped innovation offshore - where innovation is perhaps not done as well as right here in the US. 

Government CAN foster innovation but that’s exactly where private companies and the so-called free market could offer the best chances for success. 

As a former business owner, I cannot imagine being satisfied with just peddling current products - ANYbody can do that.  The “fun” in business comes in invention and development.  Any company that wants to grow will shift to an R&D model.

But SOMEbody has to start doing that R&D and do it fast.

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By bonito, September 8, 2011 at 7:49 am Link to this comment

John M

This makes a whole lot more sense than what you
Republicans propose to do.  Such as giving more tax
breaks to the rich so they may take a larger portion
of the Money pie, and therefore leaving even less
crumbs for the unfortunate millions whom find
themselves out of work because of the greed caused by
your patron Saints on Wall Street, the Military
Industrial Complex, the Banksters, and all of the
other rich and greedy people that think that working
stiffs in this country are paid too much, while these    
same wonderful folks cry out to cut Social Security,
Medicare, Medicaid, and anything else that
distinguishes this nation from a third world
dictatorship.

We citizens of these United States, whom find
themselves presently employed, spend way too much
time Idolizing the Rich Rocks, Jocks, movie and
Television stars, and TV Personalities. Just maybe
this is the time to turn and lend a helping hand to
the People that find themselves in need through no
fault of their own. The Rich will take care of
themselves, they always have, and will certainly
continue to do so in the future.

What makes you think that if We give even more
breaks to the Wealthy Corps. that they will use this
windfall to create more JOBS?  These same Corps. are
making record profits with the work force they
already have. And even if they were to hire more
employees, it would more than likely be in some
Foreign Country.

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By James . J, September 8, 2011 at 7:48 am Link to this comment
(Unregistered commenter)

Keynesian insanity;

We have had 10 years of stimulus and government spending, and nothing to show for it but more DEBT !

1. We had 1% interest rates from Greenspan fueling housing.
2. We had wars from Bush and Obama fueling defense industry employment.
3. We had two rounds of Quantitative easing from the Fed.
4. We had cash-for-clunkers.
5. We had two housing tax credit packages.
6. We had an $800 billion stimulus package from Congress for “shovel-ready” projects.
7. We had stimulus kickbacks to states.
8. We had HAMP (Home Affordable Mortgage Program).
9. We had bank bailouts out the wazoo to stimulate lending.
10. We had Small Business lending programs.
11. We had central bank liquidity swaps.
12. We had Maiden Lane, Maiden Lane II, and Maiden Lane III
13. We had Single Tranche Repurchase agreements
14. We had the Citi Asset Guarantee
15. We had TALF, TARP, TAF, CPFF, TSLF, MMIFF, TLGP, AMLF, PPIP, and PDCF
16. We had so many programs the Fed has run out of letters because they were not given an acronym.

Insanity is rare in a single person, but very common in groups, organizations, and parties, this administration and it’s Keynesian clown hangers on, have more than their fair share.

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By Mitch Green, September 8, 2011 at 7:14 am Link to this comment
(Unregistered commenter)

@John M

I think you missed the point.  The business of
business is not charity, but rather profits.  Right
now they are raking in record profits, without hiring
Americans.  So why should they hire?  What Wray and
Kelton mean by “afford” is not their actual ability
to hire - of course they can, but they won’t because
they see it as an unnecessary risk.  Investment is
subject to fundamental uncertainty: when there is no
market for additional goods, then you will not see
additional investment.

Now, I suggest you begin educating yourself about the
basic facts of our modern monetary economy, before
you start to levy such accusations.  You would do
well to start here
http://neweconomicperspectives.blogspot.com/p/modern-money-primer.html

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By hark, September 8, 2011 at 7:09 am Link to this comment
(Unregistered commenter)

This proposal personifies the term “DOA.”  Not in a trillion years would Congress even laugh at this obvious, common sense, long overdue idea.

This is America.  We don’t need no stinkin’ socialism here.  What the unemployed need to do is get up off their lazy asses and go out and get a job.  And if we stop pandering to them with unemployment benefits and other welfare state goodies, maybe they’ll just do that.

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By Russ Brinton, September 8, 2011 at 6:23 am Link to this comment
(Unregistered commenter)

Who’s the dolt?
Read the article
and listen to the CEO’s
They will NOT hire until someone is buying their products.  DEMAND!! THAT IS THE ONLY THING THAT WILL GET THEM TO EXPAND (I.E. HIRE PEOPLE)
Many CEO’s have stated that all the tax cuts in the world will not affect their hiring decisions—the ONLY thing that affects their decision to expand is DEMAND.
Right now, with MILLIONS out of work, DEMAND for commercial products is FLAT—and the companies can meet and supply that demand with EXISTING workers.
THAT IS WHY THEY ARE SITTING ON THE MONEY—NOT “CONFIDENCE” NOT OBAMA BEING MEAN TO THEM, ETC.
THAT IS EXACTLY THE POINT, THEY HAVE ALL THAT MONEY, AND NOTHING TO DO WITH IT BECAUSE THERE IS NO DEMAND, NO PRESSURE FOR THEM TO INCREASE CAPACITY.
YOU DO NOT MAKE INVESTMENTS BASED ON TAX BREAKS
Tax breaks are meaningless unless somewhere you get revenue in to pay for the investment and provide a return on investment—and that comes from—-
wait for it

DEMAND—people BUYING STUFF

Currently, the only place where we can see a SIGNIFICANT increase in demand is at the Government level.
the DOLTS are the ones that say “Government does not create a single job”—Who do they think pays for highways, bridges, airports, etc??
Private companies??
NO
The FED Govt HIRES private companies (and can provide money to states to hire companies) to
Build and repair roads, bridges, airports, highways, national parks restoration and maintenance, etc
Additionally, the Fed Govt can assist the States in keeping their firefighters, police, school teachers employed (or hire more as needed)—oh yea, unless we forget they are all “GOVERNMENT WORKERS” you know those lazy worthless TAKERS OF WEALTH that the Right Wing loves to demonize (unless they tout them as “heroes of 9/11” etc.  —Hypocrites

GEESH—HOW ABOUT A LITTLE ECON 101 EH??
NOT VOO-DOO ECONOMICS 101

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By SoTexGuy, September 8, 2011 at 5:10 am Link to this comment

Applicable quotes:

“If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.”

“Oh America, how often have you taken necessities from the masses to give luxuries to the classes… God never intended for one group of people to live in superfluous inordinate wealth, while others live in abject deadening poverty.”

“A nation that continues year after year to spend more money on military defense than on programs of social uplift,” he said, “is approaching spiritual death.”

“We need to be concerned that the potential of the individual is not wasted,” he wrote. “New forms of work that enhance the social good will have to be devised for those for whom traditional jobs are not available.”

The above by Dr. Martin Luther King Jr.


“I don’t think Dr. King would endorse any of us. I think what he would call upon the American people to do is to hold us accountable…

Barak H. Obama 2008.

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By Capt Obvious, September 8, 2011 at 4:59 am Link to this comment
(Unregistered commenter)

So let me get this strait, you want the federal
government, an entity that can’t manage it’s own
finances, continues to borrow against Social Security, medicare, medicaid and various other
programs until they are in the billions, if not
trillions of dollars in the red; the same entity that
is basically a corporate owned and operated fiat,
banana republic to give every unemployed person a
minimum wage job with benefits. Minimum wage is 7.45
cents, or round about that, even with benefits being
payed out from a separate fund (hardly
imaginable)that wage an hour is laughable. I would
propose this to the author of this article : Quit
your job, go work for .45 an hour and buy your own
benefits for say 6 months. Try it. Then come back and
tell me and the other readers of this site that you
aren’t, essentially, a slave.

What this writer proposes is insanity. It’s fiscal
insanity because how are we to produce 300 billion
dollars from anywhere except borrow more money from
our debt masters around the globe? Or just print new
dollars out of thin air, thereby devaluing the dollar
even more and pushing inflation up higher. If we did
that, just printed the 300 billion, then the 7.45 an
hour would really be more akin to say…4.50 an hour,
taking in to account the cost of gas, food and other
essential items.

The notion that we can employ every single person
that is ready and wants a job is preposterous. The
real reasons as to why we are in this fiscal mess is
that we have allowed mega corporations, foreign owned
banking cartels and Wall Street to basically buy and
sell this country down the tubes. We went from being
the last great super power to the first great failure
in the modern west. Not because we didn’t buy enough,
or employee enough people, but because we allowed
massive “reforms,” like the revocation of Glass
Steagall and other regulations, which were put into
place after the first great depression to make sure
that American investments didn’t turn into ponzi
schemes, happen.

If you can’t see the fact that this sort of idea your
proposing is both dangerous and foolhardy, then you
shouldn’t be espousing theories in the first place.

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By John M, September 8, 2011 at 4:47 am Link to this comment

“The new jobs can only come from the federal
government—the only economic entity that can afford to hire.”

You are kidding right? Senior Scholar L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City. Stephanie Kelton is an Associate Professor at the University of Missouri-Kansas City, and she is a Research Scholar at the Levy Economics Institute in New York.

Proof that our education system is terminally broken…..

Business has $2 TRILLION sitting on the side lines
and $1 TRILLION sitting over seas waiting to be
repatriated.

Dolts

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By A. Youngfellow, September 8, 2011 at 4:44 am Link to this comment
(Unregistered commenter)

Great idea.  We already have that.  It is called the Army.

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By KenKeynes, September 8, 2011 at 4:42 am Link to this comment
(Unregistered commenter)

The TARP bailout—$750 billion—could have been used to give 30 million people work. Instead, the money was used to prop up a handful of corrupt banks. ...  But that was 2009, which was not part of the election cycle. Excuse me, but I need to throw up.

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By PatrickHenry, September 8, 2011 at 3:46 am Link to this comment

We certainly have crumbling infrastructure projects this money would start to cover.

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