Here’s An Idea: Put People To Work & Print Money To Pay Them

Here’s An Idea: Put People To Work & Print Money To Pay Them

900,000 Americans filed for unemployment benefits last week.

Believe it or not, that was actually a beat versus consensus, which was looking for 935,000.

You’ll recall that the previous week’s report was a disaster. Initial claims “unexpectedly” approached 1 million again, logging the largest rise since March. That print (965,000) was revised lower to 926,000 in this week’s release.

Obviously, this is not a “good” report. It’s “better” than economists and the market expected, but with apologies to market participants, that is meaningless right now. Initial claims have just logged a second consecutive weekly print of 900,000. That’s a disaster. The four-week moving average is now 848,000.

Among other things, this means is that, in all likelihood, the US will look up a month from now and find that initial claims are still running above the pre-pandemic record a year into the crisis. That’s a failure of government. There’s just no other way to describe the situation.

Continuing claims for the week ending January 9 were 5.054 million. Again, that’s “better” than expected, with “better” being about as relative as relative gets.

Initial PUA claims rose 138,848. Continuing PUA and PEUC claims in the week ended January 2 fell to 5.7 million and 3.027 million, respectively.

While I’m sympathetic to analysts whose job isn’t to editorialize, but rather to take the numbers and compare them to previous data and to the trend, I afford no such sympathy to journalists and pundits. Anyone with editorial leeway and not subject to the rigors of bank compliance should describe this situation for what it is: A tragedy.

The idea that the richest nation in the history of civilization which issues the world’s reserve currency should go nearly a full year with weekly initial jobless claims running above 700,000 is ludicrous. It’s stone, cold crazy.

Assuming the media chooses to go the sympathetic route (versus the “better than consensus” route), the boilerplate commentary will likely be that this week’s claims data “underscores the urgency of Biden’s stimulus plan.”

While that’s true, we seem to be missing the forest for the trees. The nation’s infrastructure is in disrepair (to put it generously), food banks need staffing, vaccine rollout needs scaling up, testing needs to be expanded, and the health care system needs all the help it can get right now.

The point (in case it’s somehow unclear) is simply the following. There’s no shortage of critical jobs that need doing. There are millions upon millions of jobless Americans. And the US issues the world’s reserve currency.

You don’t need to be a quant to work out this equation. The federal government should just put people to work doing the jobs that desperately need to get done. You don’t have to worry about how to pay them, because you print money.

Hilariously (or not, depending on what you find funny) there are legions of economists and pundits out there who will tell you that isn’t feasible.

And what is their job? What do they do to contribute to society? Do they build bridges when the bridges aren’t sturdy anymore? Do they staff food banks when millions of families are lined up for miles because they’re starving? Do they go and help the government test and trace in an effort to bring an end to the worst public health crisis since the Spanish Flu?

In most cases, the answer is obviously “no.” Instead, they spend their days explaining to everyone else why something like, say, a federal jobs guarantee isn’t a viable proposition.

That’s easy to say when your job is guaranteed.


 

15 thoughts on “Here’s An Idea: Put People To Work & Print Money To Pay Them

  1. Excellent. I keep pointing out to those who will listen to read Peter Turchin. Eighty percent of Americans essentially own no stock. Stagflation has, and will continue to, harm them. When I was growing up in NYC, the richest people toned it down and tried to blend in. Since Reagan, the self satisfied rich have been rubbing the rest of the country’s nose in the sauce. Big mistake….

  2. We have in fact already become engaged in the practice of printing money and distributing it… The inevitable will be a test of the viability and /or consequences which by the definition of that word should be inevitable…There are no guarantees to anyone ..

        1. A UBI is actually fairly elegant, it gets money into the hands that need it (and admittedly some that don’t) and juices demand, theoretically creating safe(er) jobs that serve real needs at the moment. Mass hiring to do the jobs that need doing is a good idea, but paying people to stay home and not spread diseases can be a good idea situationally. Employing people effectively isn’t as easy as mailing out checks.

  3. What needs to happen is editorialization on the other side of the coin. Wow tinkle down economics accomplishes the goal of not tinkling down any real wealth. Trickle up economics oftentimes is a gusher. The aggrieved wealthy need to be educated to the fact that their gusher is only going to occur if these poor folks are working. Don’t assume that all of the wealthy are intelligent and knowledgeable about economic reality. Many of them have bought the tinkle down propaganda and think it’s better for them.

  4. Modern Monetary Theory (MMT) clearly supports the idea of paying people to work even if there is no immediate revenue to pay them. The money is a better investment than taxing and is much better if the work creates capital assets. This 1.9 trillion is a great ample – get the country moving.

  5. Self-limiting behavior, or the mentality behind it, is a bit of a paradox (probatio diabolica?). We are socialized to be self-limiting so as to make things like school and commerce run smoothly rather than haphazardly and chaotic, but as a result we also carry with us a psychic weight that manifests as attitudes about what is and isn’t allowable or even possible, and we project that onto others. We end up with highly socialized (and therefore often successful) people who tell themselves that things like war and poverty are inevitable in large part because they are insulated from them and are not willing to get their hands dirty to help others in such desperate situations. The people who make the rules will use their own success within this system to justify those rules–a self-limiting mentality whose consequence is to limit others, to deny them and to oppress them. Moreover, they allow no evidence from the victims or anyone else that their suffering is not inevitable, that these systems are in fact to blame. In their minds, the continued suffering is proof that we cannot rise above it.

    I worry about this every time I tell my kid not to do something, what’s not allowed, what the rules and consequences are. It’s all imagined.

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