Thursday, March 5, 2015

Randy Wray — Spain’s Proposal for a Job Guarantee

Yesterday I participated in a press conference and gave the first of a series of lectures in Madrid on MMT and the Job Guarantee. At the press conference, Alberto Garzón announced his party’s plan to create a million jobs in a targeted JG:
IU plantea un plan de 9.600 millones para crear un millón de empleos en un año
 
Alberto and his brother, Eduardo, are well-versed in MMT. He emphasized that the barrier to full employment is not technical but political. If the political will exists, full employment can be achieved and sustained. MMT shows the way to understanding the policy options that are available to sovereign government. 
The newspaper article summarized some of the points I made, arguing that we should no longer see the finances of a government as similar to those of a household....
Economonitor — Great Leap Forward
Spain’s Proposal for a Job Guarantee
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City

4 comments:

mike norman said...

How is Spain going to do this? Like, how is Greece going to do the things that Syriza is promising? Are these MMT people telling them it's not happening unless they reclaim currency sovereignty?

MRW said...

Mike,

Let's hope so.

Roger Erickson said...

They better define some consensus Desired Outcome, for all these job seekers to work towards.

https://plus.google.com/104140272098689841413/posts/WLL25AiHpfB

NeilW said...

"How is Spain going to do this?"

You can do it within the Eurozone/ECB structure because Government bonds act like a currency - due to the delegated nature of the ECB structure and the way TARGET2 works.

AFAICT ECB only has control over monetary policy. It doesn't actually have control over liquidity - however much it likes to trumpet that it does. In other words it is the NCBs that supply the reserves, and the ECB responds to transfers between NCBs by updating the TARGET2 balances.

A determined leader within the Eurozone, who is prepared to put their people ahead of getting a job at the EU commission after their term of office expires, could push it through - primarily because there aren't the actual legal control points within the EU or the Eurozone to stop it.

Look for the person that supposedly can say 'no' and you'll find that they can't - much the same as the chairman of the Federal Reserve.

Eurozone QE provides a huge opportunity for one of the governments to issue lots of lovely financial assets into a market that is going to become desperately short of them.

First through the door gets the cash.