The role of creating jobs must be taken from the private sector almost completely in the near future and adopted by communities, but funded by the federal government via the sovereign currency.
The public and private sectors have been moving in opposite directions for a few decades now in regard to employment. Politicians have been elected on promises of job creation but exercise little or no control over business who’s purpose is efficiency in competition, and business will win this tug of war as long as we regard government as an “expense” item for the economy. The result has been that many jobs simply drop off the list of what is needed in a healthy society.
It takes no more than a walk of a few blocks in any moderate size city to see an abundance of things needed but have no funding source to supply the labor required to accomplish them. In a healthy economy in the industrial era there would be an abundance of workers paying state and local taxes to fund the necessary, and even some unnecessary, infrastructure that provides added value to society, such as transportation, recreation, and education. As wages and employment declined so did the tax revenue necessary to support these items in revenue constrained state and community budgets that were forced to turn attention and funds to automatic safeguards and stabilizers for the unemployed/underemployed.
The answer to this opposition of purposes is to make the public sector the employer that uses excess labor to provide for common needs, shifting much of the burden of providing welfare/stabilizers to providing work to anyone who simply shows up and agrees to perform what tasks are required. Such a program could make use of many of the skills and talents of displaced workers that now goes wasted in our current system while they sit idle waiting for the business cycle to provide jobs in the private sector. If participation in such a program were almost completely at the discretion of the worker, within the commonly accepted framework of employment requirements, the program would set the minimum wage and acceptable benefit level for employment that would be responsive to regional differences in cost of living and expectation of employers who would have to compete with it for employees.
Obviously, such an ambitious program could not be funded at the state and local level. Attempting to do so would place extreme burden on the tax base at the exact time when it was most challenged. The federal government would have to use the power of our sovereign currency to fund such a program, but allow states to manage it with as little mandate as possible. Accomplishing this will require a reversal of the rhetoric around spending and taxation from the norm and some brave politicians willing to step up and lead, not follow and take advantage of misconceptions about our currency and its role in our economy.
As the monopoly issuer of a sovereign currency the federal government is not restrained by revenues in its spending. It can never run out of the currency, or fail to pay any obligation denominated in that currency. The issuer of the currency doesn’t need our currency to spend currency. The failure of the federal government spending in deficits sufficient to compensate for the drains of taxation, trade deficits, and wealth accumulation is largely responsible for the misery level in our present economy. The “debt” that we are told is the harbinger of the end of civilization is nothing more than a record of currency created by Congress that hasn’t been recaptured by taxation. It is our wealth, not our obligation.
We don’t “owe” $18+ Trillion. We “OWN” $18+ Trillion, albeit poorly distributed. Until we, and those we entrust to manage our economy, dispense with the myths and conspiracy theories surrounding our currency and utilize it to the benefit of the people we will continue to fail to realize the potential of our economy. Cutting the only source of currency that doesn’t require the private sector to leverage its own debt and expecting positive results is a fool’s errand. We pay our representatives too much to accept such poor performance from them when we have successful models in our own history to draw from.