(1) (2) You’re making great progress.
(3) Just producing more goods raises GDP, even if almost no one participates in that production or benefits from it. The formulas fit nicely into an economy dependent upon domestic production to supply wages, but as soon as we inject AI/robotics into that without some distributive curve to account for wages lost we lose the connection between production and consumption.
We see this easily when we compare inflation adjusted wages between any two generations of wage earners (20 years) since we became a net importer. Our domestic economy shifted to service jobs that were traditionally lower paying so the gains from GDP increases weren’t distributed properly to maintain living standards. In the process, workers lost both their unions (no production employees to represent) and their traditional labor party as the DNC saw the writing on the wall and shifted to serving Wall St.
With no clout in the workplace or Washington, workers simply had to watch their wages erode via inflation because the economy was no longer pegged to labor hours of production. UBI will suffer the same fate if we don’t re-establish the hour of labor as our economic anchor, which is the primary difference between the job guarantee and UBI. Once employers are freed from the obligation of providing basic needs in pay packages wages will drop like a rock on a calm day. The first economic boom to come along will cause the UBI / wage combination to be eroded and there will be no safety net to catch those left out, which are historically the same people that always get shorted.
(4)The potential for this erosion is much less with a job guarantee, as the guarantee will always establish the base point for employment and maintain the ability of workers to participate in the economy across business cycles. It prevents employers from using public money to subsidize wages as many do now with the safety nets. Employers will always have to bid for labor in a competitive auction, regardless of economic factors, which itself will give stability to the economy.
Employers also gain a pool of workers with their social and job skills intact, which is a problem in any extended downturn currently. The job guarantee isn’t an absolute guarantee, as workers have to meet minimum standards of attendance and compliance/productivity. I would not want to supervise an employee who had been reliant upon a UBI for any length of time, and I’ve supervised hundreds of employees, many in areas hard hit by job losses that were working for the first time in years.
(5)I could agree to a UBI in conjunction with a job guarantee, but the guarantee has to be primary and provide a step up from the UBI. We also have far too many potential improvements that have been ignored for decades that could add to our quality of life, and isn’t that the goal our society should be reaching for? Do you remember the “All American City” competition? The job guarantee would put that on steroids and reconnect people with their communities. Our complete dedication to the market as the only source of prosperity has been a failed experiment, and it’s long past time to acknowledge that. The job of rebuilding America is simply too big to rely on volunteer labor with no more structure or defined purpose than it has now.
(6)Working and contributing is in our DNA and is essential to the advancement of society. We should be looking to Maslow’s pyramid of needs and not simply how best to shovel income to people. Working is also fundamental to the conservative ideology, so one might assume the job guarantee would be an easier sell politically. Much of the conflict we see involving the safety nets is based in the concept that people should contribute in return for their needs being provided for, and I only see that escalating in trying to sell a UBI that would actually provide for a minimum standard of living with some dignity and enable everyone to participate in a consumption economy.
A job guarantee would quickly become recognized as the force providing a bottom to compensation, both in wages and benefits, and gain support from those employed in the private sector, where a UBI would face all the same opposition now leveled at the safety nets that has allowed them to atrophy to the point of not even providing basic needs of life. Much of this opposition is the result of misrepresentation of the monetary and fiscal process of our economy, but changing that would require a massive re-education of the people that would go against everything they think they know about economics and money.
(addendum) Our federal government never spends “taxpayer money” and is not in debt. In fact, deficit spending is vital to our economy and is the only source of dollars that can be net saved or retire private bank debt. Most of our economic decline can be attributed to this purposeful misrepresentation for political gain and that may backfire on politicians soon. The US dollar is a fiat currency that we can never run out of and we can “afford” anything that is for sale denominated in dollars, including the labor that the private sector doesn’t need or want. One only has to understand the nature of government as the “issuer”, not a “user”, of the currency and the basics of sectoral balances to see the fallacy of our current economic / political rhetoric.
We have been grossly mismanaging our economy, to the great detriment of the people, since we left the gold standard in ’71. Without a gold reserve to defend the entire nature of money and deficit/debt changed dramatically. Our entire economic focus has been concentrated on the “budget” of the federal government as if it were our household budgeting process. It is only a part of the balance sheet of the economy, and the government’s red ink is the only source of black ink available to non-government sectors. Bringing the budget in balance amounts to a hidden 100% tax rate and has been responsible for the recessions and depressions that have followed shortly after the only seven times we have come close to doing so for any period of time.
Government, at least at the federal level, is not a business that needs to “get” money from anyone, via taxation or borrowing. Federal spending “funds” both taxation and Treasury bonds, not the other way around. You can’t tax or borrow what doesn’t exist yet. Taxation drives demand for the currency and gives the economy a braking system against inflation, but it “funds” nothing. Treasury bond issues are simply a kinder, gentler, form of taxation that remove currency from circulation for a specific time and pays a small return that isn’t available on reserves.
If we continue to allow our economy to be managed as if it were our household budget neither UBI or a job guarantee will be easy to sell. The standby defense against any spending that benefits society, “How will you pay for it?” will rear its ugly head and the fallacy of the question itself becomes self enabling. The correct answer, if the question is acknowledged at all, is “We just pay for it.” Note that the question seldom comes up when the topic is going to war. That is because giving war power authorization to the Executive also conveys an ability to spend endless quantities of money without issuing bonds. The Fed is simply instructed to make sure the checks don’t bounce. The Pentagon’s spending is out of balance with budget appropriations by more than the national debt, estimated currently at “$21 TRILLION”. I think our government has a grasp on fiat money, even if we don’t.
