Given the problems the United States has been having and the unnecessary, misplaced, and wrong-headed, but very real angst of people about becoming insolvent if we continue to increase the size of the deficit, I find myself wondering why we have not turned to another time-tested and very effective New Deal solution to the problem of growing employment. That solution is the Fair Labor Standards Act.

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.

Because, we do not have a short term deficit problem, now is the time to achieve full employment since it is much-needed all across America. And in failing to do, ascribes to us for being a nation of the faint-hearted and feeble-minded.

As such, I have been arguing for an “employee effect in public policy” and thusly, this is one more article in a series and done in order to craft a political platform for the Center-Left to eventually endorse. And take for example, on taxation, all tax cuts, credits and loopholes will be either repealed, rescinded, or closed since there is no ‘direct connection’ and leading to an increase of wages and salaries for employees. And brought to you as a courtesy from the Sonoran Desert.

This is the second in a series of posts based on youtubes from a speech in Milford CT by Warren Mosler. Warren is running for the Senate in CT in the Independent Party primary. Unlike both the Democratic and Republican candidates Warren really understands economics and his forté is explaining it to people. Here’s a youtube on his proposals for restoring our economy to normal functioning and to full employment.

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?