Best New Ideas in Money
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Keith Hall (economist)
Keith Hall | |
|---|---|
 | |
| 9th Director of the Congressional Budget Office | |
| In office April 1, 2015 – May 31, 2019 | |
| Preceded by | Douglas Elmendorf |
| Succeeded by | Phillip Swagel |
| Commissioner of the Bureau of Labor Statistics | |
| In office January 2008 – January 2012 | |
| President | George W. Bush Barack Obama |
| Preceded by | Philip Rones (Acting) |
| Succeeded by | Jack Galvin (Acting) |
| Personal details | |
| Political party | Republican |
| Education | University of Virginia (BA) Purdue University, West Lafayette (MS, PhD) |
Keith Hall served as the Director of the U.S. Congressional Budget Officefrom 2015 to 2019. He was the Commissioner of the U.S. Bureau of Labor Statistics from January 2008 until January 2012. He previously worked at the Department of Commerce, Department of Treasury, the U.S. International Trade Commission, and the White House Council of Economic Advisers.
Career
Hall was nominated by President George W. Bush to the position of Commissioner of the BLS in September 2007 and confirmed by the Senate in December. He was sworn into office in January 2008 and served a four-year term ending in 2012.[1][2] Previously, he was Chief Economist for the White House Council of Economic Advisers. He also held the positions of Chief Economist for the Department of Commerce and Senior International Economist for the International Trade Commission's Research Division. He has also served on the faculties of the University of Arkansas and University of Missouri.[2]
On April 1, 2011, Hall testified on Capitol Hill to the United States Congress Joint Economic Committee that the nation's unemployment rate had fallen to 8.8 percent, a two-year low.[3] Statistics released by the BLS showed that non-farm payroll employment rose by 1.5 million from February 2010 and private sector employment increased by 1.8 million during the same period.[4]
Hall was the ninth Director of the Congressional Budget Office from April 1, 2015 to May 31, 2019.[5]
Education
Hall received his B.A. from the University of Virginia and his Ph.D. from Purdue University.[2]
References
- September 20, 2007. "Bush Nominates New BLS Commissioner". Occupational Health & Safety.none
- ^ a b c Commissioners: Keith Hall biography at bls.gov
- "NPR, Lawmakers Close to Agreement on Budget". NPR.none
- "BLS Statistics Release" (PDF).none
- CBO, U. S. (May 31, 2019). "Goodbye From CBO's Director".none
External links
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T:
We are very dependent on the political process and on stimulus to get us out of a recession and it is always too little and too late. What if we thought about prevention rather than cures?
K:
Welcome to the best new ideas and money a podcast from MarketWatch. I'm Stephanie Kelton. I'm an economist and a professor of economics and public policy at Stony Brook University,
and I'm Charles Passey a reporter at MarketWatch.
Each week, we explore Innovations and economics Finance technology and policy that rethink the way we live Works spend save and invest.
Folks the idea is that we're not going to be we're not going to be moved into being threatened to default on the debt if we don't respond. folks.
That's President Joe Biden at a State of the Union Address on February 7th, the jeers and Applause your hearing break along partisan lines as you might expect but the debt ceiling he's talking about. Well, that's a problem. We all have to worry about.
K:
It is Charles if Congress fails to raise the debt limit in time. The defaulting on all sorts of payments because normally the treasury would issue more bonds to cover previously authorized spending. But if the debt ceiling isn't raised that can't happen in a default scenario Moody's recently estimated the country could lose six million jobs and see the unemployment rate rocket to seven percent and that's not to mention the turmoil. It would almost certainly cause for Global Financial markets.
C:
at times like these I think to myself cheese wouldn't it be easier if the economy ran itself?
K:
Well, most economists agree that putting some parts of the federal budget on like an autopilot or what are known as automatic stabilizers would help our economy run smoother, especially when things get a little bumpy, you know, the automatic stabilizers are like the shock absorbers in your car. But instead of a car well, they're shock absorbers for the economy.
C:
This all started a few weeks back when we were talking about the economy and as listeners may be aware of the Federal Reserve has been raising interest rates to curve inflation. And so I said what if we did an episode about hey, is there another way to Fed so Stephanie, what are these automatic stabilizers? And are they another way to Fed?
K:
Okay. So the automatic stabilizers don't have anything to do with the FED if you think about the Federal Reserve, that's our Central Bank and what the FED does is conduct monetary policy mostly changing interest rates, but when the FED changes interest rates, they don't do it on automatic basis, you know, they don't Program the computer to raise or lower interest rates at certain points in time. They actually get together as a committee and they decide whether to push interest rates higher leave them alone or lower them that's discretionary monetary policy the FED gets to decide whether to move something when we're talking about automatic stabilizers. We're talking about things that move on their own and we're talking about fiscal policy not monetary policy. So we're talking about moving things like government spending and tax revenue, but we're not talking about Congress making decisions about whether to raise spending or cut spending or race taxes or cut taxes. We're talking about how those things happen automatically when the economy moves into a boom or into a bust.
C:
So what exactly is an automatic stabilizer then can you give me an example?
K:
sure think of federal unemployment insurance? So when people become unemployed if they're eligible for the program, they apply for the unemployment compensation and the federal government automatically provides some income support when you lose your job and so it's not as if it takes a new act of Congress in order to help people out when they become unemployed that program is already in place. And so if the economy were to go into recession a lot of people started losing their jobs, they would start applying for unemployment benefits and those payments would automatically go out and that helps stabilize the economy because you prevent people from losing all of their income you replace a portion of it. So that's why we call it an automatic stabilizer.
C:
So Stephanie when someone loses a job, which is a big terrible thing for that person. Why does it also matter in a macro sense? I mean why is replacing that lost income so important to the economy overall?
K:
Well our economy runs on. I mean if you think about GDP which is kind of the shorthand way of saying the economy GDP is just the sum total amount of money that gets spent buying newly produced goods and services every year and consumers do about two-thirds of all the spending. So supporting income and supporting consumer spending is a pretty important part of the story when you're talking about, you know safeguarding your economy.
C:
Okay, we talked about unemployment insurance as an automatic stabilizer, but unemployment isn't that like a new deal era program that dates back to the 1930s decidedly not a new idea. So what is the new idea here?
K:
Well, I think economists are often thinking about ways to improve the automatic stabilizers. But I remember hearing Janet Yellen when she was still chair the Federal Reserve it was her last speech as Fed chair and she was talking about how she thought it would be important going forward to think about ways to strengthen the automatic stabilizers because she said, you know, basically you guys leave a lot of the job up to us the Federal Reserve to respond to try to sort of manage and fine tune the economy and her point was that if we had stronger automatic stabilizers so that you didn't have to actually wait for an act of Congress when you needed some additional help supporting the economy if you could strengthen the automatic Stabilizers it would actually make the fed's job easier.
C:
So you could say this is another way to fit after all.
K:
Ah, you found a loophole. Alright, so to the extent that the automatic stabilizers make the fed's job easier. Yeah, you could say that.
C:
here's another question and let's take the covid-19 pandemic as an example. There was a lot of government spending which was intended to help people out and keep the economy running but it was discretionary spending these enormous pieces of legislation that had to be negotiated and passed in Congress. And the key here is that it didn't happen automatically, right? So what might have happened differently if we had stronger automatic stabilizers?
K:
I mean if you think about where we were and what happened after the pandemic hit there was a lot of concern that the automatic stabilizers weren't going to be strong enough to put a floor under the downturn and then millions and millions of people could lose their jobs and businesses could go under you heard people talk about Great Depression 2.0. And so to try to Stave all of that off. What did Congress do well in a bipartisan way Democrats and Republicans together kind of pulled out the big money bazooka.
there was legislation with trillions and trillions of dollars and they sent lots of checks to millions of Americans paid big increases in Federal Unemployment Insurance had payroll protection programs. I mean the money really did flow and in a sense it was Congress acting in a moment of panic because nobody knew how bad things were going to get and there was this belief that well it was better to do too much than too little.
The automatic stabilizers if they had been stronger could have done a lot of the work and taken a lot of the guesswork out of it. Right? A lot of the relief could have been better targeted. And that's one of the real benefits of the automatic stabilizers is they'll go into effect automatically and they'll start sending those dollars right where they're needed. So maybe you don't have to aim quite as wide.
C:
right and some economists and politicians have argued that we spent too much on covid relief While others have argued that we spend too little so if we had stronger automatic stabilizers, well, I guess I'm not the economist here. So if we were to strengthen these automatic stabilizers how might we go about it.
K:
Well, let's leave that to our first guest who has one idea about how to do just that.
T:
Hi. My name is pavelina charneva. I teach economics at Bart college and I'm a research scholar at the levy economics Institute and the author of the case for a job guarantee.
C:
Geneva argues that governments should literally hire unemployed workers which in her view would not only create stability for those workers, but for the economy more broadly.
T:
whatever happens to the economy whether it is a natural disaster whether it is a pandemic whether it is a financial crisis or some sort of shift that comes with globalization. We know that jobs on the chopping block as a regular occurrence. Now that actually creates enormous instability to the economy if people do not have stable employment. They are not able to First provide for themselves in this kind of normal stable way, but they also don't patronize the moment pop shops in the community. It's really our economy is built very much on our ability to spend and to participate in it. And so when people lose their jobs, there are enormous consequences.
K:
So what's the proposal and how is it an automatic stabilizer?
T:
So the proposal is very straightforward. If there are many people or give there any people looking for employment on any given day can we create a program that directly employs them? And so that would be a public employment. You can think of it as a Job Corps. You can think of it as a public service employment some sort of mechanism by which if somebody looks for employment and they cannot find it in the private sector the public sector will provide the missing jobs. And why would that be an automatic stabilizer? While suppose that this was a permanent program like Social Security or like Medicare then that will be demand driven as people lose their employment and the private sector that we know what they do. They write resumes. They send them they knock on doors they make calls, but they strike out.
what if they went to the unemployment office and they actually found employment. Now what we have is people substituting One employment opportunity for another.
and the economy is faring so much better because it doesn't have to slog through the consequences of mass unemployment.
C;
chernova believes that there is plenty of work in public service.
T:
So the jobs will come from the public sector. Much like we did. To create a program that will create public service employment opportunities job lists, if you will in every job center with some basic guidelines of what the community might need now often. These are small infrastructure projects and God knows that all of our communities can benefit from a little extra upkeep some extra infrastructure. There is just so much work to be done. We also have care projects. I mean, you know, there are so many elderly who need help with trips to the pharmacy with meal delivery. There are projects that can be created by the public sector to feel that need the way we do it today. There's a lot of this work is done by Community groups. A lot of this work is done on volunteer basis. It's not a very good sustainable way to support those people in need. In fact if anyone is doing that work, why shouldn't they be paid a good wage with good benefits? So I think that He can create the work but we also have done it in the past and perhaps we don't need to create 15 million jobs. Maybe we need to create five.
and that extra boost to the economy is going to be a boost to the moment Pop shop and that Community they will be more customers and so employment will we're going to trickle into the the private sector.
K:
According to chair Nova employment trickles into the private sector because more stable employment would lead to more steady consumer demand and thus employers needing more workers to meet that demand and that's not all a job guarantee could also result in fewer layoffs in the private sector. Why?
T:
because they're stable demand people have jobs and they have much more stable spending patterns than if they were to lose their job replace with unemployment insurance. Wait for the next job to come around the corner. It's just an entirely different mechanism.
K:
Is about business confidence for chernova with a job guarantee, even when the economy slows down employers should be able to rely on a steady or stream of Revenue and profits. While it might be clear how a job guarantee would function in a downturn. What about when the economy is booming how would a job guarantee impact inflation?
T:
Well, when an economy is growing we see what happens now firms are hiring they're looking for new employees. Now who gets hired usually the Paradox of the labor market is somebody who has a job now imagine we had a public employment option. Folks will be transitioning much more quickly into these job openings in the private sector and the public expenditure naturally contracts you no longer have to pay the wages and support those folks in the public sector.
they have now transitioned in the private sector. So as the private sector is growing as profits are rising the public contribution the government contribution to the economy is shrinking and that is also anti-inflationary.
K:
meaning that the economy recovers faster the government spends less and it collects more revenue from workers in businesses and that reduces the federal deficit chairman of his job guarantee would be a new program and would not replace any existing stabilization programs like unemployment insurance which leaves a big question if we created a job guarantee, how would we pay for it?
T:
Like all federal programs the public employment program will also be paid out of the federal budget so long as it's passed into law, they will be a budget that will be appropriated for it. And that's how it will be financed. But I think what is important in this context to recognize.
is that the government is paying for unemployment? There are many expenditures that are dedicated to addressing the consequences of unemployment whether it's housing insecurity whether it is hunger whether it is policing whether it is the Mental Health crisis, we spend a lot of financial resources to address these ills.
how about going to the heart of the problem and create these savings elsewhere in the budget? So people don't have to tap in these programs nearly at the same rate.
C：
Our strengthening the automatic stabilizers and perhaps even creating a job guarantee truly some of the best new ideas and money out there or are there other pieces of the puzzle that we haven't yet considered when we're back we're going to bring in another perspective on stabilization policy. That's after the break.
CM:
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K:17:00
if welcome back to the best new ideas in money before the break we talked about the economy's shock absorbers the automatic stabilizers. We also looked at one idea for how we might strengthen them a job guarantee.
C:
and while most economists agree that the automatic stabilizers are themselves a good idea not everybody agrees that we necessarily ought to strengthen them or if we do how we ought to do it.
H:
My name is Keith Hall. I'm currently distinguished visiting fellow at the Mercedes center George Mason University.
C:
The Mercedes center is an American libertarian free market-oriented non-profit think tank, but Hall has had a long career in the policy world. And in fact, if you can think of a job in government Hall is probably done it.
H:
I've been lucky enough to hold a number of jobs for the federal government. I've been the chief Economist for the Council of economic advisors. I've been the director that Congressional budget office. Been the commissioner at the Bureau of Labor Statistics have worked in trade trade policy issues. So I've got a lot of experience with policy.
C:
Okay. So how does he sum it all up?
H:
everything I've worked on. I'm safe following in the one category evidence-based policy. I've been like probably most other government economists. Most of what I do is shoot down bad ideas. It's not hard to come up with interesting things or ideas. Let's try this. Let's try that. Try to solve a problem. It's another thing to think it through and have an understanding what the effects going to be. What are the side effects going to be what you do to incentives? I think that's just a very important thing. To have this sort of technical support for policy makers.
K:
we asked hall for his perspective on stabilization policy which to be clear could mean fiscal or monetary policy and could be automatic or discretionary stabilization policy is a broader term than what we've been talking about. So far. The automatic stabilizers.
C:
Hall says the real problem isn't that we currently don't have strong enough automatic stabilizers. It's that we've become overly reliant on discretionary fiscal policy as a reminder fiscal policy is what Congress does.
H:
well stabilization policy is is perhaps one of the most important roles of government. And it's the idea is to do do what you can to help maintain a healthy sustainable growth. In the economy, which then of course makes a household incomes grow employment grow.
K:
like chernova Hall points to the role stabilization policy plays in keeping demand steady because it's demand that keeps the economy chugging along.
H:
really stabilization policies about adjusting aggregate demand. Stimulating it or backing off stimulation and that's all the short run effect of stabilization policy.
K:
which is why when the economy hits a big bump in the road like the covid-19 pandemic, for example, it's important to have a policy response to support demand be that an automatic one like the stabilizers. We've been talking about or a discretionary one meaning an action of Congress or of the Federal Reserve and in Halls view discretionary monetary policy or what the Federal Reserve does has been the most important tool over time.
H:
things happen and it's helpful if the government in stabilization policy tries to keep you on the path at maximum speed dampen shocks that sort of thing. And what's dominated stabilization policy historically has been monetary policy.
the discretionary part of stabilization policy. The intentional part was conducted entirely by the FED with monetary policy. Their most important tool is interest rates, they have other tools but more than anything else. They're just interest rates the federal funds rate which affects interest rates throughout the economy and the idea is the either lower rates to stimulate consumer spending and business spending and it's borrowing in particular. Or they raise rates to try to slow that down. What's changed is since around 2007 the Great Recession we've now added discretionary fiscal policy. The reason discretionary fiscal policy sort of woke up. In the Great Recession was because of interest rates. Interest rates were very very low and there was some concern that the Federal Reserve wouldn't be able to lower interest rates enough. To stimulate the economy. Problems with discretionary fiscal policy are pretty significant one is you you rack up a huge amount of debt. Second thing is the timing is very difficult on discretionary policy. And when you talk about stabilization policy, you need to react within months and quarters not years.
So it's quite easy to try to stabilize things and miss it. Worst your stabilization comes too late and importantly it can come at the wrong time.
A third thing is just pure information. It takes time to make legitimate estimates of what the economic impacts going to be of all these different things. So when legislation ultimately is passed Congress and the president really don't know exactly how much stimulus they've just provided.
C:
To sum that all up for all the Federal Reserve which uses discretionary monetary policy is for the most part doing just fine. The real problem according to all is what Congress is up to that's discretionary fiscal policy which not only creates a whole lot of debt, but a lot of the time doesn't even work in the way. It was meant to with the automatic stabilizers discretion is no longer part of the story.
H:
The most important thing rape and important thing about automatic stabilizers is it involves? No action, right? It's written into law unemployment insurance kicks in automatically. Tax revenue collection goes down when incomes go down that all happens automatically. And that's been relatively unchanged for decades.
C:
So is Hall in favor of making the automatic stabilizers stronger?
H:
I think that's a reasonable thing to think about you certainly could think about changing the stabilizers themselves so that they're stronger they kick in stronger, but you need to be a little careful about this right you need to be careful that you don't sort of overdo it.
and and Once I think is important it needs to run two directions. You want automatic stabilizers that basically behave in a symmetric way. So when they kick in and provide an unemployment insurance, for example at some point it comes off, right and you take deficits down they don't stay up too long over time. So thanking it through since we've done a good job because the stabilizer seem like they work pretty well. I think regardless of what you do the stabilizers. We really need to get the discretionary fiscal policy out of the picture as soon as we can.
K:
You might be surprised but Holland chernova who we heard from earlier are in agreement. At least when it comes to relying Less on discretionary fiscal policy.
T:
Our automatic stabilizers are weak. And so we are very dependent on the political process and on stimulus to get us out of a recession. And it is always too little and too late. It is really Shifting the thinking about public action. What if we thought about prevention rather than cures.
C:
and back to Hall? What is he think about a job guarantee?
H:
Those who think could clearly work if you're careful about how you constructed. and what you do for the incentives, you know, one of our challenges has been too many people have stayed out of the labor force the last number of years and doing anything that ultimately Reduces the incentive for people to get back into the labor force get back into labor market creates a long term problems, whatever you do with the labor market about guaranteeing jobs. You want to be sure that you keep productivity in mind with what you do and keeping people engaged with the labor force.
C:
Earlier on we talked about whether or not we'd be better off today if we had had stronger automatic stabilizers in place when covid struck.
and there's an important money question here if we had had stronger automatic stabilizers would we have spent less to deal with The Economic Consequences of the pandemic? We asked Hall.
H:
Yes. We spent a lot more in fact our discussionary fiscal policy on the last two assessions dwarfed the stabilizers way stronger than stabilizers, you know, we just spent trillions of dollars extra for the pandemic that was way stronger than stabilizers helped with.
and also you need to pay somebody's got to pay this back low interest rates, even low interest rates. Don't get you out of this and we meant to have low interest rates in the future.
C:
Interest Rates aside. This is all really interesting stuff. But it does leave me wondering if we automated even more elements of our fiscal policy. Would we miss discretionary policy? I mean we do elect these politicians to represent us after all.
K:
we do but rest assured you're never going to eliminate discretionary policy. The idea is just to have stronger automatic stabilizers. So things might be a little bit easier for the FED for Congress and ideally for the rest of us.
C:
Hey, it's all about new ideas and money.
K:
if Thanks for listening to the best new ideas and money. You can subscribe to the show wherever you listen to podcasts if you like what you heard, please leave us your rating or review. And if you have ideas for future episodes drop us a line at best new ideas in money at marketwatch.com. Thanks to pavlina chair. Nova and Keith Hall to learn more about the automatic stabilizers head to marketwatch.com. I'm Stephanie. Kelp
C:
and I'm Charles passi the best new ideas and money is a podcast from MarketWatch. The producers are Michael Mcdowell met elutesoft and Katie Ferguson. Melissa Hagerty is executive producer. Will Stanton makes this episode and Tim Roston was our Newsroom editor on this episode the best new ideas and money theme was composed by Sam retzer Stephanie. Kelton is an economist and a professor of economics and public policy at Stony Brook University and not part of the market watch Newsroom. We'll be back next week with another new idea.
CM:
The Wall Street journals what's News podcast puts you close to the people breaking the news from around the world the half the population are in acute need of food and close to home. The red hot housing market is starting to slow down uncovering facts these Investments call into question. Some of the federal government's activity and diving into markets a lot of money exiting the stock market which is like get it all twice a day in less than 15 minutes navigate your world with what's news.
T:
私たちは景気後退から抜け出すために政治プロセスと刺激策に大きく依存していますが、それは常に少なすぎて遅すぎます. 治療ではなく予防を考えたらどうですか？
K:
MarketWatch からの最高の新しいアイデアとお金のポッドキャストへようこそ。私はステファニー・ケルトンです。私はエコノミストであり、ストーニーブルック大学の経済学と公共政策の教授です。
私は、MarketWatch のレポーター、Charles Passey です。
毎週、イノベーションと経済学 ファイナンス テクノロジーとポリシーを探求し、私たちの生き方を再考します。
人々は、私たちが対応しなければ、債務不履行に陥ると脅迫されることはないと考えています。皆さん。
ジョー・バイデン大統領が 2 月 7 日に一般教書演説で演説したときのことです。期待通り党派の主張に沿ってやじと拍手が聞こえますが、彼が話しているのは債務上限です。さて、それは問題です。私たちは皆、心配する必要があります。
K:
議会が時間内に債務上限を引き上げることができなかった場合、それはチャールズです。通常、財務省は、以前に承認された支出をカバーするために、より多くの債券を発行するため、あらゆる種類の支払いの不履行。しかし、債務上限が引き上げられない場合、債務不履行のシナリオでは起こり得ないことであり、ムーディーズは最近、国が 600 万人の雇用を失い、失業率が 7% に急上昇する可能性があると推定しました。それはほぼ確実に世界の金融市場に影響を与えるでしょう。
子：
こういう時、経済が勝手に動いたらもっと楽になるんじゃないか？
K:
ほとんどのエコノミストは、連邦予算の一部をオートパイロットのように、または自動安定化装置として知られているものに投入することで、経済がよりスムーズに運営されるようになることに同意しています。あなたの車で。しかし、それらは車の井戸ではなく、経済のショックアブソーバーです。
子：
これはすべて、私たちが経済について話していた数週間前に始まりました。リスナーはご存知のように、連邦準備制度理事会がインフレを抑えるために金利を引き上げています。そこで私は、ステファニー、これらの自動安定化装置とは何ですか? そして、彼らはFRBへの別の方法ですか？
K:
わかった。したがって、連邦準備制度について考えれば、自動安定化装置は FED とは何の関係もありません。それは私たちの中央銀行であり、FED が行っているのは、主に金利を変更する金融政策を実施することですが、FED が金利を変更すると、彼らはコンピューターが特定の時点で金利を上げたり下げたりするようにプログラムすることはありません。彼らは実際に委員会として集まり、金利を引き上げるか、そのままにしておくか、引き下げるかを決定します。これは、自動安定化について話しているときに、FED が何かを動かすかどうかを決定する裁量の金融政策です。私たちはそれ自体で動くものについて話しているのであって、金融政策ではなく財政政策について話しているのです。だから私たちは」政府の支出や税収などを動かすことについて話しているのですが、議会が歳出を増やすか、支出を削減するか、税金を競うか、減税するかを決定することについて話しているのではありません。私たちは、経済が好況または不況に陥ったときに、これらのことがどのように自動的に起こるかについて話している.
子：
では、自動スタビライザーとは正確には何ですか？
K:
連邦失業保険を思い浮かべますか？したがって、プログラムの資格がある場合に失業した場合、彼らは失業補償を申請し、連邦政府はあなたが失業したときに自動的にいくらかの所得支援を提供します。プログラムがすでに実施されている失業者を支援します。経済が不況に陥った場合、多くの人が職を失い始め、失業手当の申請を開始し、それらの支払いは自動的になくなり、人々が収入をすべて失うことを防ぐため、経済の安定に役立ちますその一部を交換します。そのため、自動スタビライザーと呼んでいます。
子：
だからステファニーは、誰かが職を失うと、その人にとってはとても恐ろしいことです。なぜマクロ的な意味でも重要なのですか？つまり、失われた収入を取り戻すことが、経済全体にとってなぜそれほど重要なのでしょうか?
K:
さて、私たちの経済は続きます。GDP について考えてみると、GDP は経済の簡単な言い方です。GDP は、毎年新たに生産された商品やサービスの購入に費やされ、消費者がすべての支出の約 3 分の 2 を費やす金額の合計です。したがって、収入を支え、消費者支出を支えることは、経済を守ることについて話しているとき、物語の非常に重要な部分です。
子：
さて、私たちは失業保険を自動安定装置として話しましたが、失業は1930年代にさかのぼるニューディール時代のプログラムのようなものではなく、明らかに新しいアイデアではありません. では、ここでの新しいアイデアは何ですか？
K:
ええと、エコノミストは自動安定装置を改善する方法をよく考えていると思います。しかし、ジャネット・イエレンがまだ連邦準備制度理事会の議長を務めていたとき、それが連邦準備制度理事会の議長としての最後のスピーチであり、自動安定化装置を強化する方法を考えることが今後重要になると彼女がどのように考えているかについて話していたのを聞いたのを覚えています。ご存知のように、基本的に皆さんは連邦準備制度理事会に多くの仕事を任せています。連邦準備制度理事会は、経済を管理し、微調整しようとすることに対応しています。連邦政府の仕事を実際に容易にする自動安定装置を強化できれば、経済を支援する追加の支援が必要な場合は、議会の決定を待ちます。
子：
結局のところ、これは別の適合方法であると言えます。
K:
あ、抜け穴発見。よし、自動安定装置が連邦準備制度理事会の仕事を楽にしてくれる程度にね。ええ、あなたはそれを言うことができます。
子：
ここで別の質問です。covid-19 のパンデミックを例に取りましょう。人々を助け、経済の運営を維持することを目的とした多くの政府支出がありましたが、交渉して議会で可決しなければならなかったこれらの膨大な法案を支出するのは裁量でした. ここで重要なのは、それが自動的に行われたわけではないということですよね? では、より強力な自動スタビライザーがあれば、何が違ったのでしょうか?
K:
つまり、私たちがどこにいて、パンデミックが発生した後に何が起こったのかを考えると、自動安定装置が景気後退の下に床を置くのに十分なほど強力ではなく、何百万人もの人々が失う可能性があるという多くの懸念がありました.大恐慌 2.0 について人々が話しているのを聞いて、彼らの仕事やビジネスはあなたの下に置かれる可能性があります。そして、そのすべてを食い止めようとします。議会が超党派の方法でうまく行ったことは何ですか 民主党と共和党が一緒になって、大金のバズーカを引き出したのです。
数兆ドルの法律があり、何百万人ものアメリカ人に大量の小切手が送られ、連邦失業保険で大幅な増額が支払われ、給与保護プログラムがありました。つまり、お金は実際に流れ、ある意味では議会がパニックの瞬間に行動していたということです。
自動スタビライザーがより強力であった場合、多くの作業を実行でき、多くの当て推量を取り除くことができたはずです。右？救済の多くは、より適切に的を絞ったものであった可能性があります。自動スタビライザーの本当の利点の 1 つは、自動的に有効になり、必要な場所にドルを送金し始めることです。そのため、それほど広い範囲を狙う必要はありません。
子：
一部のエコノミストや政治家は、COVID-19 の緩和に支出が多すぎると主張していますが、支出が少なすぎると主張する人もいます。したがって、これらの自動安定装置を強化するとしたら、どうすればよいでしょうか。
K:
では、それを行う方法について 1 つのアイデアを持っている最初のゲストに任せましょう。
T:
やあ。私の名前はパヴェリーナ・チャルネヴァです。私はバート大学で経済学を教えており、レヴィ経済学研究所の研究員であり、雇用保証の訴訟の著者でもあります。
子：
ジュネーブは、政府は文字通り失業中の労働者を雇うべきだと主張し、彼女の見解では、失業者の安定だけでなく、経済全体の安定をもたらすと考えています。
T:
自然災害であろうと、パンデミックであろうと、金融危機であろうと、グローバル化に伴う何らかの変化であろうと、経済に何が起こっても。私たちは、まな板での仕事が定期的に発生することを知っています。人々が安定した雇用を持っていない場合、実際には経済に非常に大きな不安定性をもたらします。彼らは、この種の通常の安定した方法で最初に自分自身を提供することはできませんが、コミュニティの瞬間的なポップショップをひいきにすることもありません. 実際、私たちの経済は、私たちの消費能力とそれに参加する能力に基づいて構築されています。そのため、人々が職を失うと、多大な影響が生じます。
K:
では、提案は何であり、自動スタビライザーはどのようになっていますか?
T:
したがって、提案は非常に簡単です。人が多い場合、または特定の日に仕事を探している人がいる場合、それらを直接雇用するプログラムを作成できますか? そして、それは公務員になります。ジョブ・コープスと考えることができます。公共サービスの雇用とは、誰かが仕事を探して民間部門で見つけられなかった場合に、公共部門が不足している仕事を提供するメカニズムのようなものと考えることができます。そして、なぜそれが自動スタビライザーになるのでしょうか? これが社会保障やメディケアのような恒久的なプログラムであると仮定すると、人々が雇用を失い、彼らが何をしているかを知っている民間部門を失うにつれて、需要に駆り立てられるでしょう. 彼らは履歴書を書きます。彼らは電話をかけるドアをノックして彼らを送りますが、彼らは三振します。
彼らが失業保険事務所に行って、実際に仕事を見つけたらどうなるでしょうか。今私たちが持っているのは、ある雇用機会を別の雇用機会に置き換える人々です。
そして経済は、大量失業の影響に苦しむ必要がないため、はるかに良くなっています。
C;
chernova は、公共サービスには多くの仕事があると考えています。
T:
したがって、雇用は公共部門からもたらされます。私たちがしたように。公共サービスの雇用機会の求人リストを作成するプログラムを作成するには、コミュニティが現在頻繁に必要とする可能性のある基本的なガイドラインをすべてのジョブセンターで作成する必要があります。これらは小規模なインフラ プロジェクトであり、私たちのすべてのコミュニティが少し余分なインフラを維持することで利益を得ることができることを神はご存じです。やるべきことは山ほどあります。ケアプロジェクトもあります。つまり、食事の配達で薬局に行くのに助けが必要な高齢者が非常に多いということです。今日の私たちのやり方の必要性を感じるために、公共部門によって作成できるプロジェクトがあります。この作業の多くは、コミュニティ グループによって行われています。この作業の多くはボランティアベースで行われています。それ' 困っている人々を支援するための、持続可能で良い方法とは言えません。実際、誰かがその仕事をしているなら、なぜ彼らは良い賃金と良い福利厚生を支払われるべきではないのでしょうか? ですから、神は仕事を生み出すことができると思いますが、私たちも過去にそれを行ったことがあります。おそらく、1,500 万の雇用を生み出す必要はありません。たぶん、5つ作成する必要があります。
そして、経済へのその追加のブーストは、ポップショップとそのコミュニティへのブーストになり、彼らはより多くの顧客になり、雇用は民間部門に少しずつ浸透します.
K:
議長によると、より安定した雇用はより安定した消費者需要につながり、したがって雇用主はその需要を満たすためにより多くの労働者を必要としており、それがすべての雇用保証ではないため、民間部門での解雇が少なくなる可能性があるため、Nova の雇用は民間部門に徐々に浸透しています。なぜ？
T:
彼らは安定した需要があるため、人々は仕事を持ち、失業保険に代わる場合よりもはるかに安定した支出パターンを持っています。次の仕事が角を曲がって来るのを待ちます。まったく別のメカニズムです。
K:
経済が減速した場合でも、雇用者は収入と利益の安定した流れに頼ることができるはずです。景気後退時に雇用保証がどのように機能するかは明らかかもしれませんが。経済が活況を呈している場合、雇用保証はインフレにどのように影響するでしょうか?
T:
さて、経済が成長しているときに、企業が採用し、新しい従業員を探している現在、何が起こっているかがわかります。通常、労働市場のパラドックスは、仕事を持っている人であり、一般職の選択肢があると想像してみてください。人々は民間部門でのこれらの求人にはるかに迅速に移行し、公的支出は当然のことながら、もはや賃金を支払い、公共部門の人々をサポートする必要がなくなります。
彼らは現在、民間部門に移行しています。したがって、民間部門が成長し、利益が増加するにつれて、政府の経済への貢献は縮小しており、これも反インフレです。
K:
経済がより速く回復することを意味し、政府は支出を減らし、企業の労働者からより多くの収入を集め、それは連邦赤字を削減します。彼の雇用保証の議長は新しいプログラムであり、失業保険のような既存の安定化プログラムに取って代わるものではありません。雇用保証を作成した場合、どのように支払うのでしょうか?
T:
すべての連邦プログラムと同様に、公共雇用プログラムも連邦予算から支払われますが、それが法律に可決される限り、それらはそれに割り当てられる予算になります。そして、それはそれがどのように融資されるかです。しかし、この文脈で認識すべき重要なことは何だと思います。
政府が失業手当を出しているということですか？失業の結果に対処するために費やされている支出は数多くあります。それが住宅不安であろうと、飢餓であろうと、治安維持であろうと、メンタルヘルスの危機であろうと、私たちはこれらの病気に対処するために多くの財源を費やしています。
問題の核心に迫って、予算の他の場所でこれらの節約を作成するのはどうですか? したがって、人々はこれらのプログラムをほぼ同じ割合で利用する必要はありません。
子：
自動スタビライザーを強化し、おそらく仕事を作成することで、本当に最高の新しいアイデアとお金が保証されます。または、戻ってきたときにまだ検討していないパズルのピースが他にありますか安定化政策に関する別の視点。休憩後ですね。
CM：
このエピソードは、ブレット・スティーブンスが編集した繁栄するユダヤ人の未来のためのアイデアのジャーナルである sapir によって提供されます。
では、未来は何を明らかにするのでしょうか 未来について私たちが知っていることが 1 つあります。構築中です。今。私たちは皆、未来の未来、未来の未来、そしてウォール ストリート ジャーナルの未来のすべてのポッドキャストに利害関係を持っています。私はダニー・ルイスです。科学技術がどのように未来を形作っているかを掘り下げます。
あなたと私が残りの人生を過ごす場所はすべて、ポッドキャストを入手できる場所ならどこでも購読します。
か:17:00
休憩前にお金で最高の新しいアイデアに戻って歓迎するなら、私たちは経済のショックアブソーバー、自動安定装置について話しました。また、彼らの雇用保証を強化する方法について、1 つのアイデアも検討しました。
子：
ほとんどのエコノミストは、自動安定化装置自体が良いアイデアであることに同意していますが、必ずしもそれを強化する必要がある、またはそうすべきである場合はそうすべきであるということに誰もが同意しているわけではありません。
ひ:
私の名前はキース・ホールです。私は現在、メルセデス センター ジョージ メイソン大学の著名な客員研究員です。
子：
メルセデス・センターはアメリカの自由市場志向の非営利シンクタンクですが、ホールは政策の世界で長いキャリアを積んできました。そして実際、政府役所での仕事を思いつくことができれば、おそらくそれは完了しています。
ひ:
私は幸運にも、連邦政府のために多くの職に就くことができました。私は経済諮問委員会の首席エコノミストを務めてきました。私はその議会予算局の局長を務めてきました。労働統計局のコミッショナーを務め、貿易貿易政策の問題に取り組んできました。そのため、私は政策について多くの経験を積んできました。
子：
わかった。それで、彼はそれをどのように要約しますか？
ひ:
私が取り組んできたすべて。エビデンスに基づく 1 つのカテゴリのポリシーに従っていることは安全です。私はおそらく他のほとんどの政府経済学者と同じように過ごしてきました。私がしていることのほとんどは、悪い考えを打ち砕くことです。面白いことやアイデアを思いつくのは難しくありません。これを試してみましょう。それを試してみましょう。問題を解決してみてください。それを熟考し、その影響がどうなるかを理解することは別のことです. インセンティブに対して行う副作用は何ですか? それだけがとても大事なことだと思います。政策立案者にこの種の技術サポートを提供すること。
K:
私たちはホールに安定化政策に関する彼の見解を尋ねました.明確にするためには、財政政策または金融政策を意味する可能性があり、自動的または裁量的な安定化政策である可能性があります. ここのところ。自動スタビライザー。
子：
ホール氏によると、本当の問題は、現在、十分に強力な自動安定装置がないことではありません。財政政策は議会が行うものであることを思い出させるため、裁量的な財政政策に過度に依存するようになったということです。
ひ:
安定化政策は、おそらく政府の最も重要な役割の 1 つです。そして、健康で持続可能な成長を維持するためにできることをするという考えです。経済では、もちろん家計収入を増やし、雇用を増やします。
K:
同様に chernova Hall は、需要を安定させるために安定化政策が果たす役割を指摘しています。
ひ:
総需要の調整に関する本当に安定化政策。それを刺激するか、刺激を後退させるか、それがすべて安定化政策の短期的な効果です。
K:
そのため、例えば新型コロナウイルス感染症のパンデミックのように経済が大きな障害に見舞われた場合、需要をサポートするための政策対応を安定化のような自動的なものにすることが重要です。私たちは議会または連邦準備制度理事会の行動を意味する裁量的なものについて話してきました.ホールズビューでは、裁量的な金融政策または連邦準備制度が行うことは、時間の経過とともに最も重要なツールでした.
ひ:
物事が起こり、政府が安定化政策であなたを最高速度で軌道に乗せようとするなら、それは役に立ちます. そして歴史的に安定化政策を支配してきたのは金融政策でした。
安定化政策の裁量部分。意図的な部分は、金融政策で連邦準備理事会によって完全に行われました。彼らの最も重要なツールは金利です。彼らは他のツールを持っていますが、何よりも重要です。それらは単なる金利であり、経済全体の金利に影響を与えるフェデラルファンドレートであり、個人消費と企業支出を刺激するための金利の引き下げであり、特に借り入れです。または、金利を上げてそれを遅らせようとします。変更されたのは、2007 年頃の大不況以来、裁量的な財政政策を追加したことです。裁量的な財政政策が目覚めた理由。大不況では金利が原因でした。金利は非常に低く、連邦準備制度理事会がそうしないのではないかという懸念がありました。金利を十分に引き下げることができません。経済を刺激する。裁量的な財政政策の問題は非常に重大で、巨額の借金を抱えていることになります。第二に、裁量政策ではタイミングが非常に難しいということです。また、安定化政策について話すときは、数年ではなく数か月または数四半期以内に対応する必要があります。
そのため、物事を安定させようとして失敗するのは非常に簡単です。最悪の場合、安定化が遅すぎます。重要なことに、安定化が間違ったタイミングで行われる可能性があります。
3 つ目は、純粋な情報です。これらすべてのさまざまな事柄の経済的影響を正当に見積もるには時間がかかります。したがって、法案が最終的に議会を通過したとき、大統領と大統領は、自分たちがどれだけの刺激策を提供したかを正確に知りません.
子：
総じて、自由裁量の金融政策を採用しているすべての連邦準備制度理事会は、ほとんどの場合うまくやっています。すべての人によると、本当の問題は、議会が何をしようとしているのかということです。それは、大量の負債を生み出すだけでなく、多くの場合、邪魔にさえならない裁量的な財政政策です. 自動スタビライザーの裁量を使用することは、もはや話の一部ではありません。
ひ:
レイプと自動安定装置に関する最も重要なことは、それが関係していることですか? アクションはありませんよね？法律に書かれているように、失業保険は自動的に適用されます。収入が減ると税収も減り、すべて自動的に起こります。そして、それは何十年もの間、比較的変わっていません。
子：
では、ホールは自動スタビライザーをより強力にすることに賛成ですか?
ひ:
スタビライザー自体を変更して、より強くキックインするようにすることは確かに考えられると考えるのは合理的なことだと思いますが、この権利については少し注意する必要があります。一種のやり過ぎ。
そして、重要だと思ったら、2方向に実行する必要があります。基本的に対称的に動作する自動スタビライザーが必要です。したがって、彼らが失業保険を開始して提供すると、たとえば、ある時点でそれがなくなり、赤字を削減しても、時間の経過とともにあまり長く続くことはありません。スタビライザーはかなりうまく機能しているように見えるので、良い仕事をしたので、感謝しています. スタビライザーは何をしてもいいと思います。可及的速やかに裁量的財政政策を撤廃する必要があります。
K:
驚かれるかもしれませんが、先ほどお話を伺ったホランド・チェルノバも同意見です。少なくとも、裁量的な財政政策に頼ることになると。
T:
私たちの自動スタビライザーは弱いです。そのため、景気後退から抜け出すためには、政治プロセスと景気刺激策に大きく依存しています。そして、それは常に少なすぎて遅すぎます。それは本当に公共の行動についての考え方を変えています。治療ではなく予防を考えたらどうでしょうか。
子：
そしてホールに戻る？彼は仕事の保証についてどう思いますか?
ひ:
あなたがどのように構築したかについて注意すれば、考える人は明らかにうまくいくでしょう. 私たちの課題の 1 つは、あまりにも多くの人が過去数年間、労働力から離れており、最終的に労働力に戻るインセンティブを低下させるようなことをしているということです。労働市場に戻ることは、仕事を保証するために労働市場で何をしようと、長期的な問題を引き起こします。生産性を念頭に置き、人々が労働力に関与し続けるようにする必要があります。
子：
以前に、新型コロナウイルスが襲ったときに、より強力な自動安定装置を設置していれば、今日の状況が良くなるかどうかについて話しました.
そして、ここで重要なお金の問題があります。より強力な自動安定装置があれば、パンデミックの経済的影響に対処するための支出が減ったでしょうか? 私たちはホールに尋ねました。
ひ:
はい。実際、過去2回の評価に関する議論の財政政策は、安定剤が安定剤よりもはるかに強力であったことを示していました。
また、誰かがこの低金利を返済しなければならない場合でも、返済する必要があります。低金利であってもです。これをやめないでください。私たちは将来的に低金利を維持するつもりでした。
子：
金利はさておき。これはすべて本当に興味深いものです。しかし、財政政策のさらに多くの要素を自動化するかどうか疑問に思っています。裁量政策を見逃すでしょうか？結局のところ、私たちはこれらの政治家を私たちの代表として選出するということです。
K:
ただし、裁量ポリシーを排除することは決してありませんのでご安心ください。アイデアは、より強力な自動スタビライザーを用意することです。したがって、FED と議会にとって、そして理想的には私たちの残りにとって、物事は少し楽になるかもしれません。
子：
ねえ、それはすべて新しいアイデアとお金についてです.
K:
最高の新しいアイデアとお金を聞いてくれてありがとう. 聞いたものが気に入ったら、ポッドキャストを聴いている場所ならどこでもショーを購読できます。評価またはレビューを残してください。また、今後のエピソードのアイデアがある場合は、marketwatch.com で最高の新しいアイデア イン マネーをお知らせください。パブリナチェアのおかげです。自動スタビライザーの詳細については、Nova と Keith Hall が marketwatch.com にアクセスしてください。私はステファニーです。昆布
子：
私は Charles passi です。最高の新しいアイデアとお金は、MarketWatch のポッドキャストです。プロデューサーは、Michael Mcdowell met elutesoft と Katie Ferguson です。メリッサ・ハガティはエグゼクティブ・プロデューサー。Will Stanton がこのエピソードを作成し、Tim Roston がこのエピソードの Newsroom 編集者でした。最高の新しいアイデアとお金のテーマは、Sam retzer Stephanie によって構成されました。ケルトンは経済学者であり、ストーニーブルック大学の経済学と公共政策の教授であり、マーケット ウォッチ ニュースルームの一員ではありません。来週、別の新しいアイデアで戻ってきます。
CM：
ウォール ストリート ジャーナルの What's News ポッドキャストでは、世界中のニュース速報の人々と親しくなることができます。人口の半分は深刻な食糧不足に陥っており、家の近くにあり
WEBVTT - This file was automatically generated by VIMEO
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Brought to you by Empower money questions. They have
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money answers take control of your financial future
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and Empower. What's next get started today
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with your free Empower personal dashboard at empower.com.
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We are
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very dependent on the political process and on stimulus
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to get us out of a recession and it
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is always too little and too late. What if we
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thought about prevention rather than cures?
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Welcome to the best new ideas and money a podcast
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from MarketWatch. I'm Stephanie Kelton. I'm an
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economist and a professor of economics and public policy at
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Stony Brook University, and I'm Charles Passey a
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reporter at MarketWatch.
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Each week, we explore Innovations and economics Finance
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technology and policy that rethink the
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way we live Works spend save and invest.
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Folks the
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idea is that we're
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not going to be we're not going to
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be moved into being threatened to default on
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the debt if we don't respond.
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folks
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That's President Joe Biden at a State of
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the Union Address on February 7th, the jeers and
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Applause your hearing break along partisan lines as you might expect but
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the debt ceiling he's talking about. Well, that's a
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problem. We all have to worry about.
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It is Charles if Congress fails to raise the debt limit
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in time.
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The defaulting on all sorts of payments because normally the
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treasury would issue more bonds to cover previously authorized spending.
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But if the debt ceiling isn't raised that
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can't happen in a default scenario Moody's recently
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estimated the country could lose six million jobs
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and see the unemployment rate rocket to seven percent
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and that's not to mention the turmoil. It would
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almost certainly cause for Global Financial markets at times
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like these I think to myself cheese wouldn't it
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be easier if the economy ran itself?
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Well, most economists agree that putting some parts of
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the federal budget on like an autopilot or what are
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known as automatic stabilizers would help our economy run
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smoother, especially when things get a little bumpy, you
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know, the automatic stabilizers are like the shock absorbers in
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your car. But instead of a car well, they're shock
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absorbers for the economy. This all started a few
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weeks back when we were talking about the economy and as listeners
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may be aware of the Federal Reserve has been raising interest rates
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to curve inflation. And so I said what if we
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did an episode about hey, is there another way to
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Fed so Stephanie, what are these automatic stabilizers?
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And are they another way to Fed? Okay.
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So the automatic stabilizers don't have
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anything to do with the FED if you think about the
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Federal Reserve, that's our Central Bank and what
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the FED does is conduct monetary policy mostly
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changing interest rates, but when
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the FED changes interest rates, they don't do it on automatic
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basis, you know, they don't
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Program the computer to raise or lower interest rates at
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certain points in time. They actually get together as a
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committee and they decide whether to push interest rates
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higher leave them alone or lower them that's discretionary
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monetary policy the FED
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gets to decide whether to move something when we're talking
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about automatic stabilizers. We're talking about things that
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move on their own and we're talking about fiscal policy
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not monetary policy. So
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we're talking about moving things like government spending and
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tax revenue, but we're not
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talking about Congress making decisions about whether to
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raise spending or cut spending or race taxes or
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cut taxes. We're talking about how those things happen automatically
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when the economy moves into
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a boom or into a bust
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So what exactly is an automatic stabilizer then
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can you give me an example sure think of
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federal unemployment insurance? So when people
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become unemployed if they're eligible for
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the program, they apply for the unemployment compensation and
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the federal government automatically provides
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some income support when
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you lose your job and so it's not as if
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it takes a new act of Congress in order to help people
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out when they become unemployed that program is already in place.
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And so if the economy were to
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go into recession a lot of people started losing their jobs, they
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would start applying for unemployment benefits and those
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payments would automatically go out and that
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helps stabilize the economy because you prevent people from
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losing all of their income you
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replace a portion of it. So that's why we call it an automatic
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stabilizer. So Stephanie when someone
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loses a job, which is a big terrible thing for that person.
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Why does it also matter in a macro
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sense?
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I mean why is replacing that lost income so
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important to the economy overall?
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Well our economy runs on.
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I mean if you think about GDP which is kind of
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the shorthand way of saying the economy GDP is
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just the sum total amount of money that
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gets spent buying newly produced goods
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and services every year and consumers do
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about two-thirds of all the spending. So supporting
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income and supporting consumer
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spending is a pretty important part
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of the story when you're talking about, you know
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safeguarding your economy.
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Okay, we talked about unemployment insurance as an automatic
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stabilizer, but unemployment isn't that like a new deal
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era program that dates back to the 1930s decidedly
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not a new idea. So what is the
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new idea here? Well, I think economists are
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often thinking about ways to improve the
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automatic stabilizers. But I remember hearing Janet
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Yellen when she was still chair the Federal
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Reserve it was her last speech as Fed chair
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and she was talking about how she thought it would be important going
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forward to think about ways to strengthen
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the automatic stabilizers because she said, you
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know, basically you guys leave a
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lot of the job up to us the Federal Reserve to
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respond to try to sort of manage and fine tune
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the economy and her point was that if we
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had stronger automatic stabilizers so that
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you didn't have to actually wait for an act of
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Congress when you needed some additional help supporting
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the economy if you could strengthen the automatic
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Stabilizers it would actually make the fed's job easier. So
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you could say this is another way to fit after
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all. Ah, you found a loophole. Alright, so to
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the extent that the automatic stabilizers make the fed's job
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easier. Yeah, you could say that here's another
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question and let's take the covid-19 pandemic as
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an example. There was a lot of government spending which
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was intended to help people out and keep the economy running
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but it was discretionary spending these enormous pieces
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of legislation that had to be negotiated and passed
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in Congress. And the key here is that it didn't happen
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automatically, right? So what might have happened differently
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if we had stronger automatic stabilizers?
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I mean if you think about where we were and what happened
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after the pandemic hit there was a
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lot of concern that the automatic stabilizers weren't going
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to be strong enough to put a floor under the
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downturn and then millions and
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millions of people could lose their jobs and businesses could go
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under you heard people talk about Great Depression 2.0. And
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so to try to Stave all
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of that off. What did Congress do well in a bipartisan way
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Democrats and Republicans together kind of
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pulled out the big money bazooka there was legislation with
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trillions and trillions of dollars and
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they sent lots of checks to millions of
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Americans paid big increases in
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Federal Unemployment Insurance had payroll protection
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programs. I mean the money really did flow
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and in a sense it was Congress acting in
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a moment of panic because nobody knew how bad
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things were going to get and there was this belief that well it
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was better to do too much than too little
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The automatic stabilizers if they had been stronger could have done
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a lot of the work and taken a lot of the guesswork out
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of it. Right? A lot of the relief could have been better targeted.
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And that's one of the real benefits of the automatic stabilizers
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is they'll go into effect automatically and
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they'll start sending those dollars right where they're
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needed. So maybe you don't have to aim quite as
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wide right and some economists and politicians have
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argued that we spent too much on covid relief While
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others have argued that we spend too little so if we
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had stronger automatic stabilizers, well, I
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guess I'm not the economist here.
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So if we were to strengthen these automatic stabilizers
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how might we go about it. Well, let's
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leave that to our first guest who has one idea about
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how to do just that. Hi. My
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name is pavelina charneva. I teach economics at Bart
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college and I'm a research scholar at the levy economics Institute
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and the author of the case for a job
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guarantee.
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Geneva argues that governments should literally hire
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unemployed workers which in her view would not only
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create stability for those workers, but for the economy more
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broadly, whatever happens to the
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economy whether it is a natural disaster whether it
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is a pandemic whether it is a financial crisis
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or some sort of shift that
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comes with globalization. We know that
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jobs on the chopping block as a
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regular occurrence. Now that actually creates
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enormous instability to the economy
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if people do not have stable employment. They
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are not able
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to First provide for themselves in this kind of normal stable
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way, but they also don't patronize the moment
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pop shops in the community. It's really
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our economy is built very much on our
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ability to spend and to participate in it. And so
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when people lose their jobs, there are enormous consequences,
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So what's the proposal and how is
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it an automatic stabilizer? So the proposal is very
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straightforward. If there are many people or give
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there any people looking for employment on any
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given day can we create a program that directly employs
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them?
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And so that would be a public employment. You can
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think of it as a Job Corps. You can think of it as a public service employment
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some sort of mechanism by which if somebody
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looks for employment and they cannot find it in the private sector
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the public sector will provide the missing
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jobs.
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And why would that be an automatic stabilizer?
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While suppose that this was a permanent program like Social Security
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or like Medicare then that will
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be demand driven as people lose their
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employment and the private sector that we
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know what they do. They write resumes. They send them they knock
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on doors they make calls, but they strike out what if
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they went to the unemployment office and they actually
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found employment.
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Now what we have is people substituting One employment opportunity
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for another and the economy is faring so
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much better because it doesn't have to slog through
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the consequences of mass unemployment
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chernova believes that there
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is plenty of work in public service. So the
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jobs will come from the public sector.
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Much like we did.
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To create a program that will create public service
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employment opportunities job lists,
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if you will in every job center with some basic
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guidelines of what the community might need now often. These
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are small infrastructure projects and
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God knows that all of our communities can benefit
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from a little extra upkeep some
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extra infrastructure. There is just so much
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work to be done. We also have care
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projects. I mean, you know, there are so many elderly who
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need help with trips to
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the pharmacy with meal delivery. There are
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projects that can be created by the
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public sector to feel that need the way we
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do it today. There's a lot of this work is done by Community groups.
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A lot of this work is done on volunteer basis. It's
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not a very good sustainable way to support
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those people in need. In fact if anyone
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is doing that work, why shouldn't they be paid a good
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wage with good benefits? So I think that
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He can create the work but we also have done
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it in the past and perhaps we don't need to
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create 15 million jobs. Maybe we need to
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create five and that extra boost to
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the economy is going to be a boost to the
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moment Pop shop and that Community they will be more customers and
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so employment will we're going to
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trickle into the the private sector.
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According to chair Nova employment trickles into
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the private sector because more stable employment would
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lead to more steady consumer demand and thus
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employers needing more workers to meet that demand and that's
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not all a job guarantee could also result in
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fewer layoffs in the private sector. Why because they're
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stable demand people have jobs and they
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have much more stable spending patterns than
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if they were to lose their job replace with unemployment insurance. Wait
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for the next job to come around the corner. It's just an entirely
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different mechanism.
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Is about business confidence for chernova with a
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job guarantee, even when the economy slows down employers should
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be able to rely on a steady or stream of Revenue and
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profits.
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While it might be clear how a job guarantee would function in a
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downturn. What about when the economy is booming how
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would a job guarantee impact inflation? Well, when
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an economy is growing we see what happens now
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firms are hiring they're looking for new
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employees. Now who gets hired usually the
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Paradox of the labor market is somebody who has a job now
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imagine we had a public employment option.
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Folks will be transitioning much more quickly into these
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job openings in the private sector and the
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public expenditure naturally contracts you
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no longer have to pay the wages and support those
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folks in the public sector they have
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now transitioned in the private sector. So as the private sector is
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growing as profits are rising the public contribution the
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government contribution to the economy is shrinking
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and that is also anti-inflationary meaning that
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the economy recovers faster the government spends
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less and it collects more revenue from workers in businesses
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and that reduces the federal deficit chairman of
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his job guarantee would be a new program and would not
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replace any existing stabilization programs like
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unemployment insurance which leaves a big question if we
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created a job guarantee, how would we pay for it?
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Like all federal programs the public
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employment program will also be paid
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out of the federal budget so long as it's passed into law, they
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will be a budget that will be appropriated for it.
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And that's how it will be financed. But I think
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what is important in this context to recognize is that
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the government is paying for unemployment?
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There are many expenditures that
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are dedicated to addressing the
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consequences of unemployment whether it's
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housing insecurity whether it is hunger whether
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it is policing whether
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it is the Mental Health crisis, we spend
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a lot of financial resources to
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address these ills
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how about going to the heart of the problem and create these
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savings elsewhere in the budget? So people
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don't have to tap in these programs nearly at
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the same rate.
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Our strengthening the automatic stabilizers and perhaps even
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creating a job guarantee truly some of the best new
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ideas and money out there or are there other pieces of
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the puzzle that we haven't yet considered when we're back
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we're going to bring in another perspective on stabilization policy.
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That's after the break.
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This episode is brought to you by sapir a
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00:16:09.200 --> 00:16:12.200
journal of ideas for a thriving Jewish future
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lives subscribe wherever you get your podcasts.
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00:16:56.100 --> 00:17:02.700
if
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welcome back to the best new ideas in money before the
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break we talked about the economy's shock absorbers the
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automatic stabilizers. We also looked at one idea for
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how we might strengthen them a job guarantee and while
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most economists agree that the automatic stabilizers are
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themselves a good idea not everybody agrees that
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we necessarily ought to strengthen them or if we
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do how we ought to do it.
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My name is Keith Hall. I'm currently distinguished visiting
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fellow at the Mercedes center George Mason University.
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The Mercedes center is an American libertarian
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free market-oriented non-profit think
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tank, but Hall has had a long career in the policy world.
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And in fact, if you can think of a job in government Hall
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is probably done it. I've been lucky enough to hold a
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number of jobs for the federal government. I've been
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the chief Economist for the Council of economic advisors. I've been
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the director that Congressional budget office.
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Been the commissioner at the Bureau of Labor Statistics have
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worked in trade trade policy issues. So I've
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got a lot of experience with policy. Okay. So
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how does he sum it all up everything I've worked
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on. I'm safe following in the one category evidence-based policy.
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I've been like probably most
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other government economists.
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Most of what I do is shoot down bad ideas.
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It's not hard to come up with interesting things or ideas. Let's
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try this. Let's try that. Try to solve a problem.
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It's another thing to think it through and have an understanding
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what the effects going to be. What are the side effects going to be what you
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do to incentives? I think that's just a
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very important thing.
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To have this sort of technical support for policy makers
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we asked hall for his perspective on stabilization
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policy which to be clear could mean fiscal
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or monetary policy and could be
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automatic or discretionary stabilization policy
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is a broader term than what we've been talking about. So
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far. The automatic stabilizers Hall says
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the real problem isn't that we currently don't have strong
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enough automatic stabilizers. It's that we've become
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overly reliant on discretionary fiscal policy as
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a reminder fiscal policy is what
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Congress does well stabilization policy is is
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perhaps one of the most important roles of government.
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And it's the idea is to do do what you can to
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help maintain a healthy sustainable growth.
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In the economy, which then of course makes a
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household incomes grow employment grow like
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chernova Hall points to the role stabilization
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policy plays in keeping demand steady because
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it's demand that keeps the economy chugging along really
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stabilization policies about adjusting aggregate
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demand.
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Stimulating it or backing off stimulation
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and that's all the short run effect of stabilization
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policy, which is why when the
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economy hits a big bump in the road like the covid-19 pandemic, for
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example, it's important to have a policy response to
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support demand be that an automatic one like
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the stabilizers. We've been talking about or a discretionary
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one meaning an action of Congress or of the
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Federal Reserve and in Halls view discretionary monetary
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policy or what the Federal Reserve does has
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been the most important tool over time things happen
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and it's helpful if the
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government in stabilization policy tries to keep
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you on the path at maximum speed dampen shocks
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that sort of thing.
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And what's dominated stabilization policy
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historically has been monetary policy the
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discretionary part of stabilization policy.
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The intentional part was conducted entirely
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by the FED with monetary policy.
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Their most important tool is interest rates, they have other tools
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but more than anything else. They're just interest rates
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the federal funds rate which affects interest rates
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throughout the economy and the idea is
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the either lower rates to stimulate consumer
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spending and business spending and it's borrowing
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in particular.
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Or they raise rates to try to slow that
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down.
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What's changed is since around 2007 the
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Great Recession we've now added discretionary fiscal
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policy.
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The reason discretionary fiscal
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policy sort of woke up.
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In the Great Recession was because of
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interest rates.
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Interest rates were very very low and there was
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some concern that the Federal Reserve wouldn't be
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able to lower interest rates enough.
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To stimulate the economy.
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Problems with discretionary fiscal policy are pretty
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significant one is you you rack
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up a huge amount of debt. Second thing
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is the timing is very difficult on discretionary policy.
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And when you talk about stabilization policy, you
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need to react within months and quarters not years.
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So it's quite easy to try
440
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to stabilize things and miss it.
441
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Worst your stabilization comes too late and importantly
442
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it can come at the wrong time. A third
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thing is just pure information. It takes
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time to make legitimate estimates
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of what the economic impacts going to
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be of all these different things. So when legislation ultimately
447
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is passed Congress and the president really don't know exactly
448
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how much stimulus they've just provided.
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To sum that all up for all the Federal Reserve
450
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which uses discretionary monetary policy
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is for the most part doing just fine.
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The real problem according to all is what Congress is
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up to that's discretionary fiscal policy which
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not only creates a whole lot of debt, but a
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lot of the time doesn't even work in the way. It was meant to with the
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automatic stabilizers discretion is no
457
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longer part of the story The most important thing
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rape and important thing about automatic stabilizers is
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it involves? No action, right? It's
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written into law unemployment insurance kicks in
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automatically.
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Tax revenue collection goes down when incomes
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go down that all happens automatically.
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And that's been relatively unchanged for decades. So is
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Hall in favor of making the automatic stabilizers stronger?
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I think that's a reasonable thing to think
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about you certainly could think about changing the
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stabilizers themselves so that they're stronger they
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kick in stronger, but you need to be a little careful about this right
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you need to be careful that you don't sort of overdo it and
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and
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Once I think is important it needs to run two directions. You
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want automatic stabilizers that basically behave
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in a symmetric way. So when they kick in
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and provide an unemployment insurance, for example at some
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point it comes off, right and you take deficits down
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they don't stay up too long over time. So
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thanking it through since we've
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done a good job because the stabilizer seem like they work pretty well. I think
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regardless of what you do the stabilizers. We really
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need to get the discretionary fiscal policy out of
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the picture as soon as we can.
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You might be surprised but Holland chernova who we
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heard from earlier are in agreement. At least when it comes to relying
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Less on discretionary fiscal policy. Our automatic
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stabilizers are weak. And so
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we are very dependent on the political process and on
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stimulus to get us out of
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a recession.
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And it is always too little and too late.
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It is really Shifting the thinking about
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public action. What if we thought
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about prevention rather than cures and back
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00:24:45.600 --> 00:24:49.300
to Hall? What is he think about a job guarantee? Those
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00:24:48.300 --> 00:24:51.700
who think could clearly work if you're careful
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about how you constructed.
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00:24:53.600 --> 00:24:56.200
and what you do for the incentives, you know, one of
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our challenges has been too many people have stayed
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00:24:59.500 --> 00:25:02.700
out of the labor force the last number of years and
500
00:25:02.700 --> 00:25:05.900
doing anything that ultimately
501
00:25:06.800 --> 00:25:09.300
Reduces the incentive for people to get back into the
502
00:25:09.300 --> 00:25:12.600
labor force get back into labor market creates a
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00:25:12.600 --> 00:25:15.300
long term problems, whatever you do with the labor market
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about guaranteeing jobs. You want to be sure that you keep productivity
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00:25:18.600 --> 00:25:21.400
in mind with what you
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do and keeping people engaged with the labor force.
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00:25:27.400 --> 00:25:30.400
Earlier on we talked about whether or not we'd be
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00:25:30.400 --> 00:25:33.900
better off today if we had had stronger automatic stabilizers in
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00:25:33.900 --> 00:25:36.200
place when covid struck and there's an
510
00:25:36.200 --> 00:25:40.100
important money question here if we had had stronger automatic stabilizers
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would we have spent less to deal with
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00:25:42.100 --> 00:25:45.400
The Economic Consequences of the pandemic? We asked
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00:25:45.400 --> 00:25:48.200
Hall. Yes. We spent a lot more in fact
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00:25:48.200 --> 00:25:51.300
our discussionary fiscal policy on the
515
00:25:51.300 --> 00:25:55.100
last two assessions dwarfed the stabilizers way
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00:25:54.100 --> 00:25:57.300
stronger than stabilizers, you know, we just
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00:25:57.300 --> 00:26:00.100
spent trillions of dollars extra for the
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00:26:00.100 --> 00:26:03.800
pandemic that was way stronger than stabilizers helped
519
00:26:03.800 --> 00:26:06.100
with and also you need to pay somebody's got to pay
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00:26:06.100 --> 00:26:09.300
this back low interest rates, even low interest
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00:26:09.300 --> 00:26:12.100
rates. Don't get you out of this and we meant to have
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00:26:12.100 --> 00:26:13.000
low interest rates in the future.
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00:26:16.300 --> 00:26:19.400
Rates aside. This is all really interesting stuff. But it
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00:26:19.400 --> 00:26:22.300
does leave me wondering if we automated even more
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00:26:22.300 --> 00:26:25.700
elements of our fiscal policy. Would we miss discretionary
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00:26:25.700 --> 00:26:28.500
policy? I mean we do elect these politicians
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00:26:28.500 --> 00:26:31.700
to represent us after all we do but rest
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00:26:31.700 --> 00:26:35.000
assured you're never going to eliminate discretionary policy.
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00:26:34.500 --> 00:26:38.100
The idea is just to have stronger automatic stabilizers.
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00:26:37.100 --> 00:26:40.100
So things might be a little bit easier for the
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00:26:40.100 --> 00:26:43.700
FED for Congress and ideally for the rest of us. Hey,
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00:26:43.700 --> 00:26:45.900
it's all about new ideas and money.
533
00:26:48.400 --> 00:26:54.400
if
534
00:27:04.500 --> 00:27:07.200
Thanks for listening to the best new ideas and
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you like what you heard, please leave us your rating
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539
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Thanks to pavlina chair. Nova and
540
00:27:22.300 --> 00:27:25.400
Keith Hall to learn more about the automatic stabilizers head
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to marketwatch.com. I'm Stephanie. Kelp and
542
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I'm Charles passi the best new ideas and money is
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a podcast from MarketWatch. The producers are Michael Mcdowell
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met elutesoft and Katie Ferguson. Melissa Hagerty
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professor of economics and public policy at Stony Brook University
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