Currently a level of unemployment of 7 percent or more seems to be required to keep inflation from accelerating, a level quite unacceptable as a permanent situation.
Firms would be given initial entitlements to gross markup on the basis of past performance. These entitlements would be transferable and a market in them would be developed.
I define genuine full employment as a situation where there are at least as many job openings as there are persons seeking employment, probably calling for a rate of unemployment, as currently measured, of between 1 and 2 percent.
The supply-side effect of a restrictive monetary policy is likely to be perverse, in that high interest rates enter into costs and thus exert inflationary pressure.
If unemployment could be brought down to say 2 percent at the cost of an assured steady rate of inflation of 10 percent per year, or even 20 percent, this would be a good bargain.
There is no real justification for a requirement that a budget of any sort should be balanced, except as a rallying point for those who seek to hamstring government.
Nearly all educational expenditure should be considered a capital outlay, whether it provides a future return in the form of enhanced taxable income or in terms of an enhanced quality of life.
