Randall Wray Explain How To Pay For FJG

Professor L. Randall Wray discussing how to fund a Job Guarantee proposal. Because the federal government is the issuer of the currency, it is actually not constrained in its spending to how much income it receives. There’s no such thing as being “unable to afford” a program in monetary terms, because the government can’t run out of dollars, and in fact always spends by creating new money (and taxes and “borrows” by destroying that money). We saw this when the government bailed out the banks in 2008, and “created” far, far more money than the entire federal budget (and note that there was zero inflation of the price of goods and services).

Although people fear inflation whenever the talk of creating money comes up, in fact a Job Guarantee policy is not only NOT inflationary, it actually would reduce inflation. But furthermore, the claim that Wray and Modern Money Theory are making is that in fact the government ALWAYS spends by creating money, not just sometimes. A Job Guarantee would just be a normal addition to spending, like any other.

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