Re: Economic reform policy: Some views and proposals

[Warren Mosler <mosler@xxxxxxxxxxxxxx>]

>
> But isthe size of the pool of government employees
> hired to be in the last
> resort workplace to be buffer to prevent wage
> inflation? If the pool of
> workers employed in this last resort sector falls
> too low, i.e., private
> aggregate demand is too high, then wage inflation is
> likely to occur. Thus, in
> my understanding of this proposal, the employer of
> last resort workforce is a
> buffer to prevent wage inflation. Is that a
> desireable goal? [ Is this a form
> of the natural rate of unemployment with a humane
> face?]
>
> The question is why not increase aggregate demand
> for private sector
> employment so as to reduce the government employee
> labor force only to the
> necessary volume to carry out the norm al functions
> of government, e.g.,
> national defense, the national park service,
> congressional personnel, normal
> civil servants in the Dept. of State, Treasury, etc.
>
> I think these questions have to be sorted out!

Paul, I think that you are saying for you, 'do both'
is the answer?  Offer a 'minimum wage' govt job to
anyone willing and able to work and at the same time
expand agg demand so that govt is left with only
'essential' employees as above?  If so, that's exactly
what the elr proposal is.  Let the economists and
politicians debate/change, etc. the total size of govt
for whatever reasons, through demand management, etc.
(hopefully not incorrectly influenced by govt.
'finance,' as today) which also alters the elr pool,
but leave the elr in place so there is at least some
form of full employment while govt. fiddles.

Warren




=====
Warren Mosler, www.mosler.org
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Primary email contact:  mosler@xxxxxxxxxxxxxx

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