The Freedom Budget at 45: Functional Finance and Full Employment
Levy Economics Institute Working Paper No. 668
20 Pages Posted: 4 May 2011
Date Written: May 3, 2011
Forty-five years ago, the A. Philip Randolph Institute issued “The Freedom Budget,” in which a program for economic transformation was proposed that included a job guarantee for everyone ready and willing to work, a guaranteed income for those unable to work or those who should not be working, and a living wage to lift the working poor out of poverty. Such policies were supported by a host of scholars, civic leaders, and institutions, including the Rev. Dr. Martin Luther King Jr.; indeed, they provided the cornerstones for King’s “Poor Peoples’ Campaign” and “economic bill of rights.” This paper proposes a “New Freedom Budget” for full employment based on the principles of functional finance. To counter a major obstacle to such a policy program, the paper includes a “primer” on three paradigms for understanding government budget deficits and the national debt: the deficit hawk, deficit dove, and functional finance perspectives. Finally, some of the benefits of the job guarantee are outlined, including the ways in which the program may serve as a vehicle for a variety of social policies.
Keywords: Unemployment, Full Employment, Budget Deficits, National Debt, Public Policy
JEL Classification: B500, E240, E610, H600, P160
Suggested Citation: Suggested Citation