Daily Archives: April 29, 2012


By L. Randall Wray

Over the past 11 months, or so, we have examined Modern Money Theory. This is the proper paradigm for analyzing all modern countries that use their own currency.

Some have wondered whether we can separate MMT from the Job Guarantee (JG): can one accept MMT while rejecting the JG?

To be honest, I find this to be a rather strange question. We have a modern theory of Bubonic Plague. Until medical science developed a theory of disease that can be caused by microbes too small to be seen with the naked eye, all sorts of explanations of the cause of the Plague were offered. The most popular was “bad air”. The preventative measures offered (quarantine of affected individuals, evacuation of cities, burning of the property of the deceased), and improvement of public sanitation actually were quite effective—indeed, in the richer countries the plague was almost banished even before the “germ” theory of disease was ever developed. (To be sure, there were false starts—such as killing cats, that had helped keep rats in check!)

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Spain is the New Greece

By Marshall Auerback

Nearly one Spaniard in four is unemployed, according to data released on Friday, as the country’s economic and financial predicament prompted a government minister to talk of a “crisis of enormous proportions”.The data from the National Statistics Institute showed 367,000 people lost their jobs in the first three months of the year. At this pace, Spanish job losses are equivalent to 1 million per month in the United States. That means more than 5.6m Spaniards or 24.4 per cent of the workforce are unemployed, close to a record high set in 1994.

Spain has become the new Greece. Actually, in many respects Spain is now worse than Greece. The Spanish unemployment rate is already so high and unlike Athens, Madrid has made no headway in reducing its public debt levels (whereas the Greeks are close to running a primary fiscal surplus at which point they could leave and turn the problem back on to Brussels). Moreover, Spain has a huge private debt burden that is twice that of Greece.

Although I have warned on these pages before that Spain’s austerity program was leading the country to disaster, my reaction to this economic catastrophe has been one of amazement. Just take a look at this employment data

Spain First Quarter Unemployment: Summary (Table)
2012-04-27 07:00:00.13 GMT

1Q Quarterly Yearly
2012 Net Change QoQ % Net Change YoY%
Both Sexes
Over 16s 38,493.70 -14.5 -0.04% -18.4 -0.05%
Active Workforce 23,072.80 -8.4 -0.04% 10.9 0.05%
Employed 17,433.20 -374.3 -2.10% -718.5 -3.96%
Unemployed 5,639.50 365.9 6.94% 729.4 14.85%
Inactive 15,420.90 -6.1 -0.04% -29.3 -0.19%
Activity Rate 59.94% 0.00% n/a 0.06% n/a
Unemployment Rate 24.44% 1.59% n/a 3.15% n/a
16 to 64 30,606.00 -52.5 -0.17% -171.4 -0.56%
Activity Rate 74.87% 0.13% n/a 0.44% n/a
Unemployment Rate 24.59% 1.59% n/a 3.17% n/a
Employment Rate 56.47% -1.09% n/a -2.03% n/a

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