Episode 107: Modern Monetary Theory The Government as Referee, Player, and Scorekeeper
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How to Promote the Transition to Private Sector Employment
The job guarantee was implemented by Argentina in 2001 and it works. Once you've unemployed people, the private sector no longer wants to hire their damaged goods. So we promote a growing economy with fiscal policy that will orient taxes or increase in public spending so that we're not creating all these unemployed to get into it. And then the people who aren't employed, we facilitate transition to get them back into the private sector by having them employed in transition jobs. It offers a superior price anchor. It's anti-inflationary because right now we use unemployment to control inflation. But it doesn't work very well when things like bottlenecks even when there's a lot of labor shortages.
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