Nobel prize winner Joe Stieglitz recently called for a second stimulus to reduce unemployment and get the economy working well again. But the Administration seems uninterested in pushing the idea or making it an issue in the election, because it has been unsuccessful in setting the necessary frame for persuading the public that its first inadequate stimulus was only a political compromise that has done some good, but left much more yet to do. Yet we badly need that second stimulus, and if the Democrats could get their act together, get people back to work this month, and were willing to get rid of the filibuster in the Senate, we could have it quickly, and they probably could even avoid catastrophic losses in November.

Bernie Sanders appeared on Dylan Ratigan’s show yesterday talking about Elizabeth Warren’s appointment. Towards the end of his interview, he said a few words about his opposition to extending the Bush Tax cuts to the wealthiest Americans. His proposal was to end the tax breaks the high income people, take the $700 Billion freed up, spend $350 Billion on sorely needed infrastructure projects, creating millions of jobs over a 10 year period and taking the other $350 million in savings and applying it to deficit reduction. So, Bernie’s heart is in the right place but he really doesn’t get the economics of it.

Bob Herbert, in his column on June 7th said:

There is no plan that I can see to get us out of this fix. Drastic cuts in government spending would only compound the crisis. State and local governments, for example, are shedding workers as we speak.

And by July 26th he still hadn’t come up with a solution and began his column with:

The pain coursing through American families is all too real and no one seems to know what to do about it.

After reviewing the terrible state of our economy and the need to reconstruct it so that people can find work and a vibrant middle class can be rebuilt, Bob Borosage suggests that Congress go back to first principles. he briefly reviews the post- WWII history of employment legislation and says:

That debate was revisited in the 1978 Humphrey Hawkins Full Employment Act, which initially sought to revive the mandate to full employment, and the right to a job. In the end, it too was diluted, offering five ultimate goals: full employment, growth in production, price stability, balance of trade and balanced budgets. It was this act that gave the Federal Reserve the dual mandate of pursing both full employment and price stability. Needless to say, over the last decade, the goals were distorted in practice, with price stability becoming primary, while trade deficits soared, manufacturing was shipped overseas, and budget deficits rose — before the collapse.

These days the chattering classes often converse about how the Democrats can get their base charged up and working for the fall elections. For example, Greg Sargent at the Plum Line blog says:

”As you know, over the weekend Robert Gibbs dropped a political bomb, saying that Republicans just may take back the House. His comments are being widely interpreted as an urgent warning designed to get rank and file Dems to grasp the stakes of the midterms once and for all.

”But here’s the question: Will rank and file Democrats care? The thinking among Dem strategists appears to be that once Dems realize the midterms are a “choice” election, rather than merely a referendum on Dems, they’ll go out and vote. But what if Dems do see this as a referendum on their party’s rule, and base their enthusiasm solely on whether they are energized by the Dem performance?”

Deficit terrorism has lately turned to deficit hysteria. With Germany leading the way, most Eurozone countries appear ready to implement austerity programs. The United Kingdom, under its new Conservative/Liberal overlords, appears to be taken with austerity too. And Canada, Australia, New Zealand and Japan have all jumped on the bandwagon. But it doesn’t look like this bandwagon will include Brazil and Argentina. They’ve had their fill of austerity, and the prescriptions of the IMF, and they’re not taking on neo-liberal ideology again any time soon. The question is what should the United States do?

In a heartfelt piece lamenting the jobs crisis and Washington’s Hooverite response to it, Bob Herbert of the New York Times said:

There is no plan that I can see to get us out of this fix. Drastic cuts in government spending would only compound the crisis. State and local governments, for example, are shedding workers as we speak.

In the above video, Nick, otherwise known as The Modern Mystic, has raised an important question about applying Modern Money Theory (MMT) -based economics. He asks whether if all nations used MMT-based economics to achieve full employment, truly universal health care, and free public education for everyone, whether the world wouldn’t run up against resource limits, and whether these limits along with competition for resources from everyone wouldn’t cause resource price inflation?

Put another way, he is asking whether even if MMT-based, or as he calls it, “chartalist” economics, is rational at the “micro” level of the nation, it is also rational at the “sub-macro” level of a world system made up of interacting economies, national governments and interacting sovereign currencies, but no world fiscal authority? Or put still another way, is MMT-based economics, which may be fiscally sustainable in the short run in a single nation, both fiscally sustainable and socially sustainable in the longer-run in an international system of interacting, nations, currencies, and economies?