Philip L. Harvey

America's Misunderstood Welfare State: Persistent Myths, Enduring Realities.

of the United States (1989). 92. Welfare State, supra note 10, at 32, 36-37. 93. Id. at 34.

The Relative Cost of a Universal Basic Income and a Negative Income Tax

The cost of a negative income tax (NIT) designed to mimic the redistributive effects of a universal basic income (UBI) and set at a level sufficient to eliminate official poverty in the US is estimated using income distribution data for 2002. It is estimated that an NIT satisfying these conditions would have required an

Funding a Job Guarantee

826 billion increase in government spending in 2002, compared to a

Learning from the New Deal

1.69 trillion increase for an equivalent UBI. Despite this cost difference, the income and substitution effects of a UBI and an equivalent NIT are shown to be the same; and these effects are analyzed. Finally, the cost of providing a basic income guarantee (BIG) by either of these means is compared to the cost of securing the right to work and income security recognized in the Universal Declaration of Human Rights using a program of direct job creation and conventional income transfers.

Wage Policies and Funding Strategies for Job Guarantee Programs

Adopting a conventional view of the need for governments to raise the funds they spend, I have argued that a well-designed Job Guarantee (JG) programme could be funded entirely from the savings and additional revenues it would generate (Harvey, 1989; 1995). In contrast, JG advocates working in the Post Keynesian tradition have grounded their proposal for funding such a programme on a more expansive view of the fiscal capacities of currency-issuing governments. Based on that view, they have argued that a JG programme could be funded without relying on any of the funding sources identified in my analysis of the issue (Mitchell and Wray, 2005; Tcherneva and Wray, 2005; Mitchell and Watts, 2005). This article argues that these two approaches to the funding issue are not inconsistent with one another and that they jointly reinforce the conclusion that a JG programme could achieve full employment without generating unacceptable levels of inflation.

America's misunderstood welfare state : persistent myths, enduring realities

This paper argues that the direct job-creation strategy adopted by the New Deal administration of Franklin D. Roosevelt in programs like the WPA (the “New Deal strategy”) is best understood as an effort to secure what the New Dealers came to regard as a human rights entitlement—the right to work—rather than as an economic policy designed to promote the economy’s recovery from the Great Depression. The paper goes on to argue, though, that in fashioning a policy to secure the right to work, the New Dealers unknowingly developed a strategy for delivering a Keynesian fiscal stimulus that is markedly superior to other anti-recession strategies. Unfortunately, neither the New Dealers themselves nor the generation of progressive policy makers that followed them understood the multiple strengths of the New Deal strategy. Consequently, the strategy was permitted to languish, and its potential contribution to public policy in the post World War II era was lost. In an effort to rekindle interest in the New Deal strategy, the paper concludes by pointing out how much more effective the New Deal strategy would have been in combating the so-called Great Recession than the more conventional spending and tax-cut policies the Federal Government actually has deployed. For a fraction of the sum the Federal Government has allocated to stimulate the American economy since the fall of 2008, the New Deal strategy could have immediately reduced the nation’s unemployment rate to pre-recession levels while simultaneously promoting a more rapid recovery in private-sector hiring.

Securing the Right to Employment: Social Welfare Policy and the Unemployed in the United States

As the contributions to this volume illustrate, most of the scholarly literature produced in recent years on the subject of job guarantees has been produced by people working within the Keynesian/post-Keynesian theoretical tradition. Within this theoretical framework, a job guarantee is seen as an economic measure that promises to remedy a critical weakness in conventional Keynesian aggregate demand management policies. That weakness is the inability of those policies to achieve full employment—and the benefits associated with it—without sacrificing price stability.