Keith Evans
2 min readSep 14, 2021

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If people think their taxes are paying for a project and there are extra workers standing around it those people will become angry at the waste and demand better efficiency, likely from private contractors instead of hired workers for the government. The government workers aren't seen as net assets to the economy as long as the people think of them as a zero-sum addition they must pay for with their taxes.

However, if the people understand that the project is funded by federal money creation and the extra worker represents added dollars into their local economy, not dollars drained from their earnings, they are less likely to complain about efficiency or demand privatizing the project.

The wholesale move to privatization of normal government functions began when Reagan loudly voiced his complaints about "efficiency" and that government couldn't do anything right except collect "tax dollars". Government as a business replaced government as a service and was forced to be competitive, meaning less federal dollars injected into the wage base at the same time as dollars were drained from the economy via taxation to "pay for" the projects, which cannot happen within the government's system of payments.

I hope this analogy served to let you better understand how federal money creation can be viewed from different perspectives and the loss of "government as a service" in our economy. An issuer of a sovereign fiat currency can even be the employer of last resort with a job guarantee to set the floor for private sector employers in wages and benefits. This would end the use of involuntary unemployment as a tool of monetary policy at the Fed.

The program would be an automatic stabilizer for the economy, working countercyclically to the business cycle. Private-sector employers would only have to outbid the program's wage and benefits to expand their labor force with workers who have their social and work skills intact, which is a big detriment to the private-sector hiring unemployed workers currently. People would never fall out of the labor market unless they chose to.

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Keith Evans
Keith Evans

Written by Keith Evans

Meandering to a different drummer.

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