Is it always better to have someone producing something rather than nothing? Chapter 8: "Is It 'Better to Produce Anything than Nothing'? Job Guarantees Versus Idleness" by Lucas M. Engelhardt. One of MMT's signature policy proposals is a federal job guarantee. The government would offer employment at a fixed wage to anyone willing and able to work. They say that this would eliminate involuntary unemployment, put idle resources to work, and help stabilize the economy. But Dr. Engelhardt asks: "Why are resources idle in the first place?" - p. 190 Drawing on W. H. Hutt's The Theory of Idle Resources, Dr. Engelhardt explains that apparent "idleness" isn't necessarily wasteful. A machine might sit unused because its owner expects more valuable opportunities in the future. Someone might remain unemployed while searching for a better job. Students forgo employment while in school. Some people simply prefer leisure to the available employment opportunities. Hutt called some of these situations pseudo-idleness. What appears to be wasted productive capacity is actually in the factor owner's best interest. If anyone else has a better idea on how to use the "idle" machine or labor, they are free to bid for it and employ it. Simply observing that a resource isn't currently being used doesn't establish that putting it to work would improve economic welfare. But there's another problem with the job guarantee: "very few jobs rely on labor alone." - p. 203 Suppose the government hires unemployed workers to paint murals. They'll need paint, brushes, ladders, transportation, etc. Other government jobs require computers, office space, and other equipment. All these complementary resources have alternative uses. And here's where the calculation problem enters (once again--noticing a theme in this book?): "Without accounting for profit and loss, it is impossible to say whether the cost of these workers is worth the value of the services they provide." - p. 204 Dr. Engelhardt points out that even if job guarantee wages are comparable to unemployment benefits, the additional costs of employing workers could make the program substantially more expensive. Anyone (even government bureaucrats!) can find something for unemployed workers to do. The trick is finding something for them to do where the value of what they produce exceeds the opportunity cost. Only the profit and loss system of the market can do that.

Real PPR per capita didn't get back to 2007 peak until Q3 2013. I've been thinking about recession dating recently. I don't think it should be based on peaks and troughs in total spending (or Real PPR/cap, to be honest). Should look at indicators of credit expansion (for boom phase), structure of production distortions, an "oops!" point when malinvestments are realized, and then a recovery phase.