Certainly, there is inflation. There isn't full employment.
In France, you were counted as "unemployed" if you were registered with the national employment agency and actively looking for employment according to their criteria.
If you didn't find anything (for example because the opportunities on offer were too far away, or various other reasonably human reasons) after a certain time, the agency dropped you, and you were no longer part of the "unemployed" statistic. Unemployment went down!
I've also seen the government there change their criteria for unemployment (for example dropping you after 9 months instead of 12), to make it seem like unemployment went down.
(I'm a big believer in statistics-driven policies, but statistics, like anything involving humans, can be corrupted)
Even regardless, the current U-6 rate is very close to the record low: https://fred.stlouisfed.org/series/U6RATE
Using even the broadest measure of unemployment[1], numbers are back down where they were before Covid. The labor force participation rate is still down though[2] which means that about 2% of US adults aren't looking to go back to work at all- many of them are likely now retired, students, or stay-at-home parents.
[1] https://fred.stlouisfed.org/series/U6RATE [2] https://fred.stlouisfed.org/series/CIVPART
Plus there are a record number of unfilled job openings.
If, as you were implying, U3 was hiding extra unemployment right now but U6 was more accurate, then it wouldn't be so closely tracking U3.
> Plus there are a record number of unfilled job openings.
Yes, which would basically imply that it's incredibly easy for anyone who wants a job to get one.
For something to be a non sequitur, it must be a non sequitur to everyone, not just to one. This is not a non sequitur for two reasons.
1) The sentence you quoted was not intended to be a
consequence of the earlier statement. Unemployment rate
and number of job openings are connected, but not as you
believe. Correlation is not causation. You are drawing
inferences without cause.
2) Full employment depends upon the number of job openings as
well as the unemployment rate, which you ignored from
my comment.
No. That is your inference but is clearly not implied.
Additionally, MMT states that it needs to use taxes to manage inflation, which the US federal gov't is clearly not doing, which undermines the testability of the theory.
3.8% is near historic lows.
More importantly: "full employment" doesn't mean unemployment is literally 0% - in fact, an unemployment rate of 0% would be actively bad, because it indicates that people are unable to leave their jobs (even temporarily) to seek better opportunities or life changes - usually because inflation is too high.
[1] https://www.bls.gov/opub/mlr/2017/article/full-employment-an...
I know "full employment" is a loaded term here, but at least in a general sense all who want a job could at least find something right?
One thing I'd be interested in seeing a discussion on as it relates to this topic is what happens when there is a legitimate labor shortage.
The remaining part of the MMT puzzle as I see it is: raise corporate taxes, and see if it helps bring inflation under control. If raising rates slowly doesn't quite do it, this should be the next go to for policy makers.
I don't understand this. Increasing taxes reduces the spending power of the individuals who pay the taxes. But that taxed money doesn't evaporate. The government spends it or redistributes it. It ultimately makes its way back into the private sector.
From that POV, destroying money (or, if you prefer, reducing the rate of increase in the money supply) is exactly what taxation does.
As explanations change, value changes, so anything can be a currency at the level of the individual--in this way, at least for conscious minds, a public monopoly on money is, while possible, morally wrong. It's a form of Marxism.
There's already been a solution the problem of state monopoly on symbolic abstractions for value (money), that started with Bitcoin and has been growing a new global economy since 2009.
In USA, sales taxes are paid to government by the vendor. As just a typical person in USA who does not work for federal government nor reside in D.C., sales taxes and property taxes are all that I (implicitly) pay. The vendor and I determine amount and type of my payment.
Your comment had a threatening tone implying something bad may happen. What is the lurking threat?
Definitely possible to not have what is known as wage income. Many do it. The super rich structure their affairs to avoid being in that system of voluntary contributions.
> Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox[1] macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires.[2][3] MMT is opposed to the mainstream understanding of macroeconomic theory, and has been criticized by many mainstream economists.[4][5][6]
> MMT says that governments create new money by using fiscal policy and that the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector.[7] MMT is debated with active dialogues about its theoretical integrity,[8] the implications of the policy recommendations of its proponents, and the extent to which it is actually divergent from orthodox macroeconomics.[9]
Regarding this being a "test" of MMT, I don't see why. The first part of the first sentence of that second paragraph, MMT says that governments create new money by using fiscal policy and that the primary risk once the economy reaches full employment is inflation, which seems to be precisely what has happened, no?