Who will fill the Output Gap?

MMT suggests we look at the output gap: (capacity minus utilization), before we consider the fiscal deficit: (spending minus taxes). The only question is, who should fill this gap?

We are enjoying an unprecedented time of prosperity, leisure, and human cooperation in the modern world. In developed countries, you can order something on Amazon, and have it arrive inside a week.

In this environment, it is not easy for people to find purposeful, productive roles in society. Our needs are met and we live lives of ease and abundance, provided we have sufficient income. It can be confusing to know how to add or contribute. This is a classic problem: what gift do you get for someone who has everything? What job can you perform in a society with Amazon?

This leads not directly to scarcity, but to confusion and frustration. Our social structures and financial rules were designed for a very different world than what we have today. Our standards, rules, regulations, and most importantly, productive programs, were not designed for these kinds of problems. We have been so eager to achieve prosperity, that we don’t understand how to handle it now that it is here.

We spend a lot of time trying to bring the “people” to “jobs”. If only we had more “STEM”, politicians complain. Our good jobs would not go overseas. We could be a powerhouse in a competitive and cut-throat world.

That world does not sound fun to me. I think we should bring the jobs to people. We can take them how they are, and help them find good stuff to do, and ensure they are rewarded appropriately. We don’t need to stress about running out of money or racking up massive debt, if we learn how to create healthy financial relationships.

In our modern world, under rules such as labor standards and credit money systems, it can be challenging for an entity besides federal government to fill this gap. Being an employer comes with many challenging expectations, but perhaps more importantly, you are faced with the choice of selling essentials at cut-throat prices, or looking for a sustainable niche of consumer preference in a climate of huge income inequality. It’s confusing as hell.

I don’t think our labor standards are unreasonable, I think we can actually raise the bar in some ways, provided we create a supportive political, financial, and social climate.

This goes far beyond praising and encouraging “entrepreneurs”. We can organize ourselves politically to create productive programs pursuing shared important objectives. Federal government can do this. State governments and local governments can as well. Non-governmental entities can as well. I only suggest we look at this as political action and not only entrepreneurial-ism.

I see a lot of prosperity in our communities. We have the tools and resources we need to all be prosperous. But we don’t always understand how to organize this.

When we talk about capacity minus utilization, the most important dimension is human life and human effort. Are we engaging people for what they are really worth?

You may disagree with MMT’s suggestion that federal government provide a fallback for filling the output gap called a Job Guarantee. But I hope you agree with me that this is an important problem. I hope you look for ways to help us organize our communities to meet our most important needs.