Job Guarantee vs. "Priming the Pump"

• "Priming the pump": increases in deficit spending principally for stimulation of aggregate demand

• How is Job Guarantee different from "priming the pump"?

  • Most federal spending purchases labor services at higher wage/salary levels

  • People at high wage/salary levels are more fully employed right now

  • Additional demand for their labor services could lead to shortages in that real resource

    • Upward pressure on salaries could trigger inflationary cycle

  • Hiring the unemployed at low level poses much less risk of inflation