Pavlina Tcherneva - Bottom Up Fiscal Policy: Direct Employment of the Unemployed

To cure unemployment, mostly we prime the pump: we devise fiscal strategies on the presumption that jobs follow economic growth. But the strategies have not worked, unemployment remains high. That is why Pavlina Tcherneva studies policies that target the unemployed directly. She says that the government can reduce income inequality and restart the growth engine by putting people back to work. In other words, growth follows jobs. Investigating different models of fiscal policy -- this is new economic thinking.

Comments

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The words of both Keynes and Adam Smith are often taken out of context to support a political ideology, so how refreshing to see that INET is sponsoring an economist who has done the work of studying the original insights of Keynes. And how refreshing too that Ms Tcherneva is questioning the the notion of trickle down-economics in times when sustainable (and meaningful, not just the aggregated money accounts so important to mathematically-driven economists) growth is so elusive that corporations are holding trillions of cash not knowing how to invest it.

In ancient times the elites knew, according to the movie "Surviving Progress" (released in late 2011), that wealth naturally trickled UP, not down, and consequently recognized the necessity every so often for the rich to forgive the debts of the poor. Apparently the Romans decided to break with that tradition, so I wonder if there is something significant in the fact that the fall of the Roman civilization was followed by the millennium we today call "The Dark Ages"?

Since the days of the Ancient Egyptians, when the debt forgiveness practise was, I understand, first instituted (or at least recorded), we've moved on in our expectations of debt management by the bottom levels of the socioeconomic "heap". And perhaps we will move on to more realistic expectations for what happens when we dramatically lighten the load of taxation of those at the top. What's reasonable to expect from each? And what are each of their typical value sets? What do we know about such factors? Isn't knowing both of them with some degree of accuracy critical to achieving socio-economic balance?

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This idea was tried in the 1930's after the crash of 1929. It did not work then and it will not work now. The associated Keynesian Theory is obsolete!

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David Chester is obviously not only undereducated, but utilizing some libertarian bias to write off arguments without considering them.

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Where's your evidence that it didn't work? Even before WWII, unemployment under the New Deal was dramatically reduced. When an economy becomes debased, the thing to do is restore the solid foundation of real wealth--infrastructure, housing, agriculture, manufacturing of useful and needed goods.

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I no longer believe that within the traditional economic box we'll find any real, long term solutions. I've been at it more than 40 years, and I've watched one after another bright economist doing the same old experiment, and expecting different results.

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