Nice site. Check out this one sometime……

By the way, Tom missed the point. You said very clearly that ELR “with a non-disruptive wage” is what we’re talking about. His SA rising inflation scenario assumed the wage would be set such that agg demand would outpace productive capacity. We’ve always argued that if you set the ELR wage too high you would get inflation–so . . . beyond changing the paradigm, we also need economists to LISTEN more carefully so they don’t misinterpret our proposals.

The Argentina decision to discontinue the ELR should be analyzed. It seems there is a strong political contingent against monetary transfers (fiscal grants) to the unemployed. Likely the Argentine experiment failed due to political non-participation (why?) by the unemployed parties that benefited from the policy. Connected political participants resent the ‘easy’ access provided to those that are ‘unwilling’ (unable?) to participate in the political process.

I’ve proposed replacing government ‘grants’ with government ‘loans’. For instance, there is much less political resistance to student loans than there is to student grants. The battle for acceptance of fiscal solvency as a nonissue is an important step for both options.

Past and present financial crises are case studies of the political acceptability of funneling government resources through loans rather than grants.

Point – which is more likely to be achievable?

To find the political support to create government grants to target the unemployed worker?

To find the political support to create government loans to target the unemployed entrepreneur?

Yes, we already have banks to create loans but we also already have government spending to create grants. Neither works very well for the nonpolitical, unemployed.