The best measure of excess capacity within an economy is involuntarily unemployment. There are people willing and able to perform paid work for things that need doing yet can find no takers. Another key indicator that should leap out at you is crumbling infrastructure. China has provided us with a fantastic example of how a nation can ma…
The best measure of excess capacity within an economy is involuntarily unemployment. There are people willing and able to perform paid work for things that need doing yet can find no takers. Another key indicator that should leap out at you is crumbling infrastructure. China has provided us with a fantastic example of how a nation can marshal its human resources in such a way that lifts hundreds of millions out of poverty and develops its infrastructure via massive investment facilitated by government spending.
The comparison with China does not work here. A centralized plan works when you are confident that the future you are trying to achieve is the correct one, which works well when you are following. America, for better and for worse, is not following, so it could totally spend billions of dollars on suboptimal infrastructure. Moreover, just because there are people willing to work does not mean that they will automatically work in a way that benefits society and themselves. What if the military hires them to invade Canada?
I feel that there needs to be a vision for the future, a metric to determine what that vision will cost, and a way to estimate and ultimately measure what was gained from that vision. Mere GDP growth means little if it is a result of inflation.
Giving government a blank check means that they could crowd out private spending and completely dominate the economy until they crash it. I know this scenario is unlikely, but I would still like to know whether it is happening before it happens, and that means that we need some measures of whether government is spending too much and whether the money is well-spent.
Sajid - We don't do the vision thing in the US. It might get in the way of profit-making at all costs. Besides, no one, not even the Chinese can be sure that any particular vision will come to pass in the future. Too many unknowns. Nevertheless, we could do better.
Suboptimal infrastructure: Most projects are granted to the lowest bidder. Unless they are cost-plus contracts rather than fixed price, the contractor will cut corners and suboptimal will be the inevitable result.
Employers determine whether or not the work benefits society, not the workers. Your "what if" isn't relevant. The military doesn't make invasion decisions, politicians do.
Government spending does not crowd out private spending. That's an economic concept that has been shown to be false, because it's based on incorrect assumptions.
The best measure of excess capacity within an economy is involuntarily unemployment. There are people willing and able to perform paid work for things that need doing yet can find no takers. Another key indicator that should leap out at you is crumbling infrastructure. China has provided us with a fantastic example of how a nation can marshal its human resources in such a way that lifts hundreds of millions out of poverty and develops its infrastructure via massive investment facilitated by government spending.
The comparison with China does not work here. A centralized plan works when you are confident that the future you are trying to achieve is the correct one, which works well when you are following. America, for better and for worse, is not following, so it could totally spend billions of dollars on suboptimal infrastructure. Moreover, just because there are people willing to work does not mean that they will automatically work in a way that benefits society and themselves. What if the military hires them to invade Canada?
I feel that there needs to be a vision for the future, a metric to determine what that vision will cost, and a way to estimate and ultimately measure what was gained from that vision. Mere GDP growth means little if it is a result of inflation.
Giving government a blank check means that they could crowd out private spending and completely dominate the economy until they crash it. I know this scenario is unlikely, but I would still like to know whether it is happening before it happens, and that means that we need some measures of whether government is spending too much and whether the money is well-spent.
Sajid - We don't do the vision thing in the US. It might get in the way of profit-making at all costs. Besides, no one, not even the Chinese can be sure that any particular vision will come to pass in the future. Too many unknowns. Nevertheless, we could do better.
Suboptimal infrastructure: Most projects are granted to the lowest bidder. Unless they are cost-plus contracts rather than fixed price, the contractor will cut corners and suboptimal will be the inevitable result.
Employers determine whether or not the work benefits society, not the workers. Your "what if" isn't relevant. The military doesn't make invasion decisions, politicians do.
Government spending does not crowd out private spending. That's an economic concept that has been shown to be false, because it's based on incorrect assumptions.
Amazing. This is ALL true.
But it has nothing to do with MMT.
What's the "theory" about money ....... you know, the monetary theory ?
Leave out the currency, a separate, matter.
And leave out all the great Post-Keynesian policies.
Waddaya got ?
The Money Apprentice.