Barnaby, better to walk before we run | Bill Mitchell

Today I have been thinking about the macroeconomics textbook that Randy Wray and I are writing at present. We hope to complete it in the coming year. I also get many E-mails from readers expressing confusion with some of the basic national income concepts that underpin modern monetary theory (MMT). In recent days in the comments area, we have seen elaborate examples from utopia/dystopia which while interesting fail the basic national income tests of stock-flow consistency. Most of the logic used by deficit terrorists to underscore their demands for fiscal austerity are also based on a failure to understand these fundamental principles. So once again I provide a simple model to help us organise our thoughts and to delve into the elemental concepts. It is clear that in order to come to terms with more complicated aspects of MMT, one has to “walk before they can run”. So its back home today. Read on...

And more reading on this:

1. A simple "business card" economy or where business cards are the money.
2. What causes mass unemployment?
   

   Functional finance and modern monetary theory

    
    

A propos du revenu universel, solution à la crise économique et de l'emploi. Job guarantee - Wikipedia

A job guarantee (JG) is an economic policy proposal aimed at providing a sustainable solution to the dual problems of inflation and unemployment. Its aim is to create full employment and price stability, by having the state promise to hire unemployed workers as an employer of last resort (ELR).^[1]
The economic policy stance currently dominant around the world uses unemployment as a policy tool to control inflation; when cost pressures rise, the standard monetary policy carried out by the monetary authority (central bank) tightens interest rates, creating a buffer stock of unemployed people, which reduces wage demands, and ultimately inflation. When inflationary expectations subside, these people will get their jobs back. In Marxian terms, the unemployed serve as a reserve army of labor. By contrast, in a job guarantee program, a buffer stock of employed people (employed in the job guarantee program) provides the same protection against inflation without the social costs of unemployment, hence potentially fulfilling the dual mandate of full employment and price stability.^[1]
​

​​

https://en.wikipedia.org/wiki/Job_guarantee

Welcome to heteconomist: MMT and the Crisis | heteconomist

The global economic crisis, and government policy responses to it, have sparked controversy and debate. Many claim that the deficit expenditures undertaken in countries such as the US and Japan will impose higher tax rates and interest rates on future generations, and some fear a collapse in the dollar and runaway inflation. The problems faced by Greece, Ireland, Spain and other vulnerable members of the European Monetary Union are interpreted as omens of the fate about to befall the US and other nations unless fiscal austerity is imposed and public debt dramatically reduced. Read more...