Re: Keynesian Christmas!

[William F Hummel <wfhummel@xxxxxxxxxxxx>]

Bill Mitchell wrote:

>Dear PKT
>
>Classic case for a Job  Guarantee...
>
>As long as taxation collections can be made Argentina should:
>
>(a) abandon the currency peg against the dollar.
>(b) renegotiate all foreign contracts held by the govt in the peso. take it
>or leave it.
>(c) introduce a JG with wages in peso.
>(d) introduce short-term price controls if needed.
>(e) absolutely resist dollarisation.
>
>best wishes
>bill
>
The catch is in the proviso "as long as tax collections can be
made".  A fair and wide-based tax collection system has been
lacking, and is one of the key problems in Argentina.

Without that, I don't see anything here that would incentivize
private enterprise to invest in the production of goods and
services sufficient to maintain reasonable balance with the flood
of pesos from a JG program.  Price controls would certainly work
against that.  The problem would be shifted to the supply side
rather than the demand side, assuming you are not proposing a
centrally managed production system.

William F Hummel