I'm sorry, this is silly science. Maybe I'm jaded, but if you want to study the reaction of lava going into water, this is happening every day (now) at Kilauea. But the ending piece of alarmism over phreatomagmatic explosions being triggered by water injected into magma is nonsense - researchers and private sector drillers have drilled into magma in Hawaii and in Iceland with no adverse affect at the surface.

No, I didn't confuse anything. Almost every single country benefits from 'illegal' immigrants as well as regular ones. France, for example, has thousands of illegal immigrants from mostly Islamic countries that provide services to it's mostly aging native population. We benefit no more and no less than any other nation from illegal immigration, as @newtboy mentioned, if you import food products or grow them locally you probably are benefiting from illegal immigration.

As far as your evidence, I hope this will suffice as 'some':

Steven A. Camarota, PhD, Director of Research at the Center for Immigration Studies, in a Jan. 6, 2015 article, "Unskilled Workers Lose Out to Immigrants," available at nytimes.com, stated:

"There are an estimated 11 million illegal immigrants in the country and we also admit over a million permanent legal immigrants each year, leading to enormous implications for the U.S. labor market. Bureau of Labor Statistics data show that there are some 58 million working-age (16 to 65) native-born Americans not working — unemployed or out of the labor market entirely. This is roughly 16 million more than in 2000. Equally troubling, wages have stagnated or declined for most American workers. This is especially true for the least educated, who are most likely to compete with immigrants (legal and illegal).

Anyone who has any doubt about how bad things are can see for themselves at the bureau's website, which shows that, as of November, there were 1.5 million fewer native-born Americans working than in November 2007, while 2 million more immigrants (legal and illegal) were working. Thus, all net employment gains since November 2007 have gone to immigrants."

Jan. 6, 2015 - Steven A. Camarota, PhD

George J. Borjas, PhD, Robert W. Scrivner Professor of Economics and Social Policy at Harvard University, in a Sep./Oct. 2016 article, "Yes, Immigration Hurts American Workers," available at politico.com, stated:

"[A]nyone who tells you that immigration doesn't have any negative effects doesn't understand how it really works. When the supply of workers goes up, the price that firms have to pay to hire workers goes down. Wage trends over the past half-century suggest that a 10 percent increase in the number of workers with a particular set of skills probably lowers the wage of that group by at least 3 percent. Even after the economy has fully adjusted, those skill groups that received the most immigrants will still offer lower pay relative to those that received fewer immigrants.

Both low- and high-skilled natives are affected by the influx of immigrants. But because a disproportionate percentage of immigrants have few skills, it is low-skilled American workers, including many blacks and Hispanics, who have suffered most from this wage dip. The monetary loss is sizable...

We don't need to rely on complex statistical calculations to see the harm being done to some workers. Simply look at how employers have reacted. A decade ago, Crider Inc., a chicken processing plant in Georgia, was raided by immigration agents, and 75 percent of its workforce vanished over a single weekend. Shortly after, Crider placed an ad in the local newspaper announcing job openings at higher wages."

Sep./Oct. 2016 - George J. Borjas, PhD

Vernon M. Briggs, Jr., PhD, Emeritus Professor of Labor Economics at Cornell University, in an Oct. 14, 2010 briefing Report to the US Commission on Civil Rights, "The Impact of Illegal Immigration on the Wages and Employment Opportunities of Black Workers," available at usccr.gov, stated:

"Because most illegal immigrants overwhelmingly seek work in the low skilled labor market and because the black American labor force is so disproportionately concentrated in this same low wage sector, there is little doubt that there is significant overlap in competition for jobs in this sector of the labor market. Given the inordinately high unemployment rates for low skilled black workers (the highest for all racial and ethnic groups for whom data is collected), it is obvious that the major looser [sic] in this competition are low skilled black workers…

It is not just that the availability of massive numbers of illegal immigrants depress wages, it is the fact that their sheer numbers keep wages from rising over time, and that is the real harm experienced by citizen workers in the low skilled labor market."

Oct. 14, 2010 - Vernon M. Briggs Jr., PhD

There are more educated people than I that hold the same opinion, but let me give you an easier to understand, and absolutely true, example. How do I know it is true? When I was a much younger man, I worked for a roofing company. So I lived it.

The company I worked for was owned by a family friend, who had worked for most of his life in the field and had an excellent reputation. However, in the 90's around the time NAFTA was passed and (not related, I hope) illegal immigration spiked in Texas, he began to lose out to other companies. He did some snooping around and found out they were often charging hundreds of dollars less in their estimates than he could possibly offer, at least while still making a profit. He also found out that the two companies that were taking most of his business were staffed with illegal workers, being paid much lower wages than he could give to his legal employees.

Fast forward a year and he was close to declaring bankruptcy. Just like any type of labor where you pay your employees little to nothing comparatively to their compatriots in the same field, you cannot compete fairly. Net result, he was forced to let us go one by one, replacing us with illegals.

Obviously, I moved on, learned a different skill and began to make far more than I would have as a simple laborer. But the fact remains that an entire industry was undermined and radically changed by the inclusion of cheap illegal labor. This will not change if we simply ignore illegal immigration because it is the 'nice' thing to do. What it will accomplish is that young people will slowly find that certain jobs are out of their selection. It also will get worse the more accepted and commonplace illegal immigration becomes. I know for a fact that while I worked at Apple there were entry level support techs that were illegally here. Perhaps you will say that it is a benefit because it would prevent offshoring, but I disagree. What it does is make the working class poorer and doesn't solve the other issues brought about by illegal immigration, such as Emergency Rooms being flooded by people who can't afford insurance. Oh yeah, I forgot to mention that it is common to go to the ER and see people stacked like cordwood because they can't refuse patients unless they are a private hospital.

As far as The Jungle, and my statement about it and it's author, I was merely pointing out that as much as you try to put forth that illegal immigrants have a bad life here in the USA, the fact is that we used to treat legal immigrants far worse. Perhaps it was a reach on my part, but it seemed logical at the time.

I doubt we will agree on any of this, but I respect your opinion. I live in a state that has a very large proportion of illegal immigrants, and while you are correct that they are generally not a criminal negative to society, they do have severe effects which I think you are overlooking. I do think that legal immigration policy needs massive change and businesses that exploit the almost slave like labor of illegals to make more profit should be punished severely. In the meantime, when we do catch illegals, they should be deported, not protected by a sympathetic politically motivated law enforcement group.

The National Farmers Federation says that “mulesing remains the most effective practical way to eliminate the risk of ‘flystrike’ in sheep” and that “without mulesing up to 3,000,000 sheep a year could die a slow and agonising death from flystrike”.

A fiber farmer is heavily invested in the health and well being of their animals for the simple reason that an animal that isn’t happy and healthy can’t produce a sell-able product. An animal going through a period of stress of any kind produces a fiber that breaks.

Wool fiber has properties that make it unequaled by many other natural fibers/ Lanolin is also a critical oil that cannot be replaced with other oils. Lanolin and its many derivatives are used extensively in both the personal care (e.g., high value cosmetics, facial cosmetics, lip products) and health care sectors. Lanolin is also found in “lubricants, rust-preventative coatings, shoe polish, and other commercial products”

In some cases, the products derived from sheep make up a very large portion of a country's GDP. Banning sheep farming could cripple a country like New Zealand economically.

That said, obviously there are some horrible scenes in the video. Obviously there needs to be more oversight to control abuse to the animals. However, I would like to point out that the video did cherry pick a couple of companies that had egregious policies. Also, if the mulesing that was shown was part of the PETA video, it was staged with a fake lamb. PETA even admitted they staged that video for 'educational' purposes. I don't know if it was the same clip, but just putting that out there.

I suppose it is hard for any pre-internet virus to compare in terms of damage to these 5, but one that stands out in my mind:

Form (circa 1990 or so), and its variants like Form.A would infect the boot sector of your hard drive, and from there could infect any floppy disk that you used on the computer. Most PCs at the time would try to boot from a floppy disk left in the drive, which would spread the infection.

I guess that many variants didn't really do much of anything particularly bad, but I got Form.A one time and it nuked the Master Boot Record (like virus #5 in the video) of my PC. Since DOS / Windows (3.1 at the time I think) wouldn't boot, I (mistakenly) assumed that it had formatted my hard drive, and then lost all of my data by reformatting.

I remember a span of about a year where any 3.5 inch floppy disk being passed around offices or schools in my home town had a roughly 80% chance of being infected with Form.A. So that seems like a pretty impressive infection and spread rate, without advantage of being able to spread through the internet!

Muslim extremist immigrants are a huge threat to the livelihoods of many Americans in the religious dogma sector. Take a stand, only buy into good ol American Christian hatred.

On what @SDGundamX said, before I read his post I was going to say that passion industries are generally known for notoriously long hours, bad pay and horrible treatment. I was actually going to mention game developers (especially what I've read about crunch time before release), also chefs who often get paid less than the waiter staff, and of course most creative jobs where job insecurity and poor pay abounds.

It's simple economics. These industries know that these people are willing to put up with more to do what they love. There may not even be a conscious decision on an individual level for a given employer looking to hire, you simply know that you can find employees for X profession at X level of pay and can't really offer more if you want to stay competitive with your competitor. Meanwhile there are people streaming in who don't consider the pay or conditions beforehand and are just adding to a surplus of workers.

That's not to say that people can't be successfully, job secure or wealthy in these sectors but we know most notably from the arts that most of the money accrues to the top actors, top musicians. I do agree that when you see these people giving motivational speeches about 'never giving up' or 'always chasing their dreams', there are dozens who put in just as much effort but never got their lucky break.

The arts may be one of the worst examples, but I think this is true to a lesser extent for all 'passion' industries. It's textbook selection bias and our tendency to lionize success. On a related point, it's like how we idolize successful entrepreneurs and think their autobiographies contain the holy grail to success when perhaps the hypothetical book by a failed entrepreneur detailing their failings might actually be more beneficial to our lives.

Eric Tymoigne and Scott Fullwiler made it into an article over at The Week:
Hillary Clinton loves to trumpet Bill's budget surplus. She shouldn't.

It also features a graph of sectoral balances which makes me all warm and fuzzy inside.

@bobknight33 --

I continue to agree with you on a lot of what you're saying (but not all).

Trump and Sanders are both riding a wave of frustration in the people, as you say. Their current popularity, even if both only go downhill from here, has already partially sent that message to both parties. I don't think Trump would make a good president, but if he wins the election I think that really hammering home that message of frustration could be a significant positive outcome. Same goes for some hypothetical scenario resulting in Sanders getting elected, although I personally feel quite positive about the other stuff that I think Sanders would bring to the table, unlike how I feel about Trump.

If there's one area where I think the government could stand to get *bigger*, it's in oversight, evaluation, and accountability. Being under the microscope and heavily scrutinized perhaps isn't a recipe for optimal efficiency, but I think we desperately need more of it in government AND the private sector.

Early in my lifetime, a large corporation that had a relatively benign monopoly by today's standards was considered a big enough deal for the government to step in and break it up. AT&T / Bell got split into the "Baby Bells". Corporations now are vast juggernauts compared to that, but since they make gigantic profits I guess we collectively see them as bastions of Capitalism. But I think that in reality they are doing much more harm to Capitalism with their monopolies, collusion, and corruption.

I think Sanders is the candidate most likely to even *try* to do something to roll back that shift, and bring back oversight and accountability to government. Hillary sure as hell wouldn't do it. And I don't think Trump would either -- he is the literal face of a gigantic Corporation himself, after all.

I had high hopes for Obama. He didn't live up to them, but to be fair I think the lion's share of that is on the Legislative branch. That taught me to be careful about putting much of any stock into Presidential campaign promises, particularly about things outside the scope of what the Executive branch can actually do.

I think Trump and Clinton both put *themselves* first, ahead of all else. I don't think Clinton gives a flying fuck about any of us plebs, beyond attempting to pander to large demographic blocks of us just enough to secure our votes. Maybe Trump cares more for Joe Average than Clinton, but only incidentally -- as a Capitalist he needs Joe Averages to buy his products, and buy into his image.

I don't get the same read from Sanders. I think he actually does give a shit. A lot of his agenda would require a cooperative Legislature, which he wouldn't get -- just like Obama. So in terms of changing the status quo, perhaps his biggest impact would simply be in sending the establishment a loud and clear message that we are no longer content with business as usual in Washington. A message very similar to what electing Trump would send.

It would/ will take me some soul searching, but assuming that Hillary gets the Democrat nomination over Sanders, a desire to send that message might be enough to get me to vote for Trump. But voting for a reasonably tolerable option from a minor party might serve that end just as well. Say Jesse Ventura running as a Libertarian, or Jill Stein from the Green Party. Stein has the very distinct advantage (from my perspective) of being the only current candidate who has said that she would grant a Presidential pardon to Ed Snowden (although Ventura would too, IF he runs). Pardons are one of the few things that a President can actually *do* unilaterally -- and that makes that a pretty damn good "single issue" prompt for my vote, in my opinion.

This graph (edit: replaced with non-paywalled source), or rather its German equivalent, has become absolutely irreplacable to me when discussing macroeconomics. That display of sectoral balances is such an immensely powerful illustration of why federal deficits are not the devil's handiwork.

@greatgooglymoogly

Thanks for taking the time to watch it.

Like I said in my previous comment, this talk needs to take a lot of shortcuts, otherwise its length would surpass anyone's attention span.

So, point by point.

By "balanced budget", I suppose you refer to the federal budget. A balanced budget is not neccessarily a bad thing, but it is undesirable in most case. The key reason is sectoral balances. The economy can divided into three sectors: public, private, foreign. Since one person's spending is another person's income, the sum of all spending and income of these three sectors is zero by definition.

More precisely: if the public sector runs a surplus and the private sector runs a surplus, the foreign sector needs to run a deficit of a corresponding size.

Two examples:
- the government runs a balanced budget, no surplus, no deficit
- the private sector runs a surplus (savings) of 2% of GDP
- the foreign sector must, by definition, run a deficit of 2% of GDP (your country runs a current account surplus of 2% of GDP)

- the government runs a deficit of 2% of GDP
- the foreign sector runs a surplus of 3% (your current account deficit of 3%)
- your private sector must, by definition, run a deficit of 1% of GDP, aka burn through savings or run up debt

If you intend to allow the private sector to net save, you need to run either a current account surplus or a public sector deficit, or both. Since we don't export goods to Mars just yet, not all countries can run current account surpluses, so you need to run a public sector deficit if you want your private sector to net save. No two ways about it.

Germany runs a balanced public budget, sort of, and its private sector net saves. But that comes at the cost of a current account surplus to the tune of €250B. That's 250 billion Euros worth of debt other countries have to accumulate so that both the private and public sector in Germany can avoid deficits. Parasitic is what I'd call this behaviour, and I'm German.

If you feel ambitious, you could try to have both surplus and deficit within the private sector by allowing households to net save while "forcing" corporations to run the corresponding deficits. But to any politician trying that, I'd advise to avoid air travel.

As for the "devaluation of the currency", see my previous comment.

Also, she didn't use real numbers, because a) the talk is short and numbers kill people's attention rather quickly, and b) it's a policy decision to use debt to finance a deficit. One might just as well monetise it, like I explained in my previous comment.

Helicopter money would be quite helpful these days, actually. Even monetarists like AEP say so. If fiscal policy is off the table (deficit hawkery), what else are you left with...

As for your question related to the Fed, let me quote Eric Tymoigne on why MMT views both central bank and Treasury as part of the consolidated government:

"MMT authors tend to like to work with a consolidated government because they see it as an effective strategy for policy purpose (see next section), but also because the unconsolidated case just hides under layers of institutional complexity the main point: one way or another the Fed finances the Treasury, always. This monetary financing is not an option and is not by itself inflationary."

MMT principle: the central bank needs to be under democratic control, aka be part of government. The Fed in particular can pride itself on its independance all it wants, it still cannot fulfill any of its goals without the Treasury's help. It cannot diverge from government policies too long. Unlike the ECB, which is a nightmare in its construction.

Anyway, what does he mean by "one way or another the Fed finances the Treasury, always"? Well, the simple case is debt monetisation, direct financing. However, the Fed also participates by ensuring that Primary Dealers have enough reserves to make a reasonable bid on treasuries. The Fed makes sure that auctions of treasuries will always succeed. Always. Either by providing reserves to ensure buyers can afford the treasuries, by replacing maturing treasuries or buying them outright. No chance whatsoever for bond vigilantes. Betting against treasuries is pointless, you will always lose.

But what about taxation as a means to finance the Treasury? Well, the video's Monopoly example illustrated quite nicely, you cannot collect taxes until you have spent currency into circulation. Spending comes before taxation, it does not depend on it. Until reserves are injected into the banking system, either by the Fed through asset purchases or the Treasury through spending, taxes cannot be paid. Again, monetary financing is not optional. If the Treasury borrows money from the public, it borrows back money it previously spent.

Yes, I ignored the distribution of wealth, taxation, the fixation on growth and a million other things. That's a different discussion.

Well, cheers for sticking with it anyway, I really appreciate it.

It's a one hour talk on the deficit in particular, and most of what she says is based on MMT principles that would add another 5 hours to her talk if she were to explain them. With neoclassical economics, you can sort of jump right in, given how they are taught at schools and regurgitated by talking heads and politicians, day in and day out. MMT runs contrary to many pieces of "common sense" and since you can't really give 10 hour talks everytime, this is what you end up with – bits and pieces that require previous knowledge.

I'd offer talks by other MMT proponents such as William Mitchell (UNSW), Randy Wray (UMKC) or Michael Hudson (UMKC), but they are even less comprehensible. Sorry. Eric Tymoigne provided a wonderful primer on banking over at NEP, but it's long and dry.

Since I'm significantly worse at explaining the basics of MMT, I'm not even going to try to "weave a narrative" and instead I'll just work my way through it, point by point.

@notarobot

"Let's address inequality by taking on debt to increase spending to help transfer money to large private corporations."

You don't have to take on debt. The US as the sole legal issuer of the Dollar can always "print more". That's what the short Greenspan clip was all about. Of course, you don't actually print Federal Reserve Notes to pay for federal expenses. It's the digital age, after all.

If the federal government were to acquire, say, ten more KC-46 from Boeing, some minion at the Treasury would give some minion at the Fed a call and say "We need $2 billion, could you arrange the transfer?" The Fed minion then proceeds to debit $2B from the Treasury's account at the Fed (Treasury General Account, TGA) and credits $2B to Boeing's account at Bank X. Plain accounting.

If TGA runs negative, there are two options. The Treasury could sell bonds, take on new debt. Or it could monetise debt by selling those bonds straight to the Fed – think Overt Monetary Financing.

The second option is the interesting one: a swap of public debt for account credits. Any interest on this debt would be transfered straight back in the TGA. It's all left pocket, right pocket, really. Both the Fed and the Treasury are part of the consolidated government.

However, running a deficit amounts to a new injection of reserves. This puts a downward pressure on the overnight interest rate (Fed Funds Rate in the US, FFR) unless it is offset by an increase in outstanding debt by the Treasury (or a draw-down of the TT&Ls, but that's minor in this case). So the sale of t-bonds is not a neccessity, it's how the Treasury supports the Fed's monetary policy by raising the FFR. If the target FFR is 0%, there's no need for the Treasury to drain reserves by selling bonds.

Additionally, you might want to sell t-bonds to provide the private sector with the ability to earn interest on a safe asset (pension funds, etc). Treasury bonds are as solid as it gets, unlike municipal bonds of Detroit or stocks of Deutsche Bank.

To quote Randy Wray: "And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed."

Point is: for a government that uses its own sovereign, free-floating currency, it is a political decision to take on debt to finance its deficit, not an economic neccessity.

"Weimar Republic"

I'm rather glad that you went with Weimar Germany and not Zimbabwe, because I know a lot more about the former than the latter. The very, very short version: the economy of 1920's Germany was in ruins and its vastly reduced supply capacity couldn't match the increase in nominal spending. In an economy at maximum capacity, spending increases are a bad idea, especially if meant to pay reparations.

Let's try a longer version. Your point, I assume, is that an increase in the money supply leads to (hyper-)inflation. That's Quantity Theory of Monetary 101, MV=PY. Amount of money in circulation times velocity of circulation equals average prices times real output. However, QTM works on two assumptions that are quite... questionable.

First, it assumes full employment (max output, Y is constant). Or in other terms, an economy running at full capacity. Does anyone know any economy today that is running at full capacity? I don't. In fact, I was born in '83 and in my lifetime, we haven't had full employment in any major country. Some people refer to 3% unemployment as "full employment", even though 3% unemployment in the '60s would have been referred to as "mass unemployment".

Second, it assumes a constant velocity of circulation (V is constant). That's how many times a Dollar has been "used" over a year. However, velocity was proven to be rather volatile by countless studies.

If both Y and V are constant, any increase in the money supply M would mean an increase in prices P. The only way for an economy at full capacity to compensate for increased spending would be a rationing of said spending through higher prices. Inflation goes up when demand outpaces supply, right?

But like I said, neither Y nor V are constant, so the application of this theory in this form is misleading to say the least. There's a lot of slack in every economy in the world, especially the US economy. Any increase in purchases will be met by corporations with excess capacity. They will, generally speaking, increase their market share rather than hike prices. Monopolies might not, but that's a different issue altogether.

Again, the short version: additional spending leads to increased inflation only if it cannot be met with unused capacity. Only in an economy at or near full capacity will it lead to significant inflation. And even then, excess private demand can easily be curbed: taxation.

As for the Angry Birds analogy: yeah, I'm not a fan either. But all the other talks on this topic are even worse, unfortunatly. There's only a handful of MMT economists doing these kinds of public talks and I haven't yet spotted a Neil deGrasse Tyson among them, if you know what I mean.

They really have to change the flavor of these politicians. Maybe they should have forced private sector time.

@RedSky

First, if it were up to me, you could take over as Minister of Finance in this country tomorrow. Our differences seem miniscule compared to what horrendous policies our last three MoF have pushed. The one prior, ironically, was dubbed the most dangerous man in Europe by The Sun.

We're in agreement on almost everything you mentioned in your last comment, so I'll focus on what I perceive differently.

First, I'd differentiate between fiscal stimulus and fiscal spending, the former being a situational application of the latter. As you said, fiscal stimulus during an economic crisis tends to be inadequate with regards to our macroeconomic objectives. You can neither whip out plans for major investments at a whim nor can you mobilize the neccessary resources quickly enough to make a difference and still be reasonable efficient. Not to mention that it only affects certain parts of the economy (construction, mostly), leaving others completely in the wind. So I'm with you on that one, it's a terribly inefficient and ineffective approach.

Automatic stabilizers work magnificently in this regard, but they barely take any pressure from the lower wage groups, especially if unemployment benefits come with a metric ton of strings attached, as is the case in Germany. A basic income guarantee might work, but that's an entirely different discussion.

The problem I see with merely relying on reasonable automatic stabilizers in the form of payments is that they do put a floor into demand, but do very little to tackle the problem of persistent unemployment due to a lack of jobs. As useful as training and education are, the mere number of highly educated people forced to work mundane jobs tells me that, at best, it doesn't work, and at worst pushes a systemic problem onto the individual, leading to immense pressure. Not to mention the psychological effects of being unemployed when employment is tauted as a defining attribute of a proper person -- aka the demonization of the unemployed.

It's still somewhat decent in Australia, but in Europe... it's quite a horrible experience.

Anyway, my point is that I'd rather see a lot more fiscal spending (permanent!) in the shape of public sector jobs. A lot of work cannot be valued properly by the market; should be done without the expectation of a return of investment (hospitals, anyone?); occurs in sectors of natural monopolies -- all of that should be publicly run. A job guarantee, like your fellow countryman Bill Mitchell advocates quite clearly, might be an approach worth trying out. Economy in the shit? More people on the public payroll, at rather low (but living wage!) wages. Do it at the county/city level and you can create almost any kind of job. If the private sector wants those people instead, they'd have to offer better working conditions. No more blackmail through the fear of unemployment -- you can always take a public job, even if it is at a meagre pay.

I should probably have mentioned that I don't buy into the notion of a stable market. From where I am standing, it's inherently unstable, be it through monopolies/oligopolies, dodging of laws and regulations (Uber), impossibility to price-in externalities (environmental damage most of all) or plain, old cost-cutting leading to a system-wide depression of demand. I'm fine with interfering in the market wherever it fails to deliver on our macroeconomic objectives -- which at this point in time is almost everywhere, basically.

Healthcare is all the rage these days, thanks to the primaries. I'd take the publicly-run NHS over the privately-run abomination in the US any day of the week. And that's after all the cuts and privatizations of the last two decades that did a horrible number on the NHS. Fuck ATOS, while we're at it.

Same for the railroad: the pre-privatization Bundesbahn in Germany was something to be proud of and an immeasurable boost of both the economy and the general standard of living.

In the mid/long run, the effects of automation and climate change-induced migration will put an end to the idea of full employment, but for the time being, there's still plenty of work to be done, plenty of idle resources to be employed, and just nobody to finance it. So why not finance it through the printing press until capacity is reached?

As for the Venezuela comparison: I don't think it fits in this case. Neither does Weimar Germany, which is paraded around quite regularly. Both Venezuela and Weimar Germany had massive supply-side problems. They didn't have the production capacity nor the resources to meet the demand they created by spending money into circulation. If an economy runs at or above its capacity, any additional spending, wherever it comes from, will cause inflation. But both Europe and the US are operating faaar below capacity in any measurable metric. You mentioned LRAS yourself. I think most estimates of it, as well as most estimates of NAIRU, are off quite significantly so as to not take the pressure off the wage slaves in the lowest income sector. You need mass unemployment to keep them in line.

As you said, the participation rate is woefully low, so there's ample space. And I'd rather overshoot and cause a short spike in inflation than remain below potential and leave millions to unneccessary misery.

Given the high level of private debt, there will be no increase in spending on that front. Corporations don't feel the need to invest, since demand is down and their own vaults are filled to the brim with cash. So if the private sector intends to net save, you either have to run a current account surplus (aka leech demand from other countries) or a fiscal deficit. Doesn't work any other way, sectoral balances always sum up to zero, by definition. If we want to reduce the dangerous levels of private debt, the government needs to run a deficit. If we don't want to further increase the federal debt, the central bank has to hand the cash over directly, without the issuance of debt through the treasury.

As for the independant central bank: you can only be independant from either the government or the private sector, not both. Actually, you can't even be truly independant from either, given that people are still involved, and people have ideologies and financial ties.

Still, if an "independant" central bank is what you prefer, Adair Turner's new book "Between Debt and the Devil" might be worth a read. He's a proponent of 100% reserve banking, and argues for the occasional use of the printing press -- though controlled by an inflation-targeting central bank. According to him, QE is pointless and in order to bring nominal demand up to the level we want, we should have a fiscal stimulus financed by central bank money. The central bank controls the amount, the government decides on what to spend it on.

Not how I would do it, but given his expertise as head of the Financial Services Authority, it's quite refreshing to hear these things from someone like him.

Huh, never thought of that. So true...and I will add to this. In the past jobs in service have been able to absorb people into it to take up the loss of jobs (Say in agriculture and such.) So when Henry Ford made his assembly line, jobs were created pretty much everywhere. Restaurants are but one great example of this.

But with the techno revolution, the service sector was already pretty full. Now it is saturated. If I see one more new gas station down here in Florida, or another restaurant open, it will be too soon. I remember TWO, TWO Starbucks in the same mall. Such a false economy...

Now add automation and boom...

Automation is not the only problem, true. But here is the funniest part. Everything in a free market is commodified. That is for sale. This includes life saving services even. I.e., a free market. And yet people somehow complain when corporations invest in politics. They claim that investments should not be made in that sector, which I laugh at...

But anyways, to suggest that corporations will lower prices (I.e., profits) just because transportation costs go down is ignoring traditional responses. Lets say grocery stores--which have enormous competition and have been failing let and right--jacked up prices because of rising fuel costs...then fuel went to 1.70 a gallon. Whew, those (lack) of savings are rolling on in... When the labor becomes 0 dollars, we shall see exactly that back...

Now, with that said, hell yeah automate driving. I never implied we shouldn't. Just the 39,000 lives saved, insurance costs, etc are worth it. But I am pointing out a cumalative stacking of bad effects coming up (which have already been slowly hitting.)