I think we have to agree on the macro-economics to proceed because I wouldn’t necessarily advocate the FJG or a full FICA holiday if the federal government was actually revenue constrained. I’d still make FICA taxes more progressive or something but wouldn’t abolish them. So, to proceed with my argument we must assume that the concern with federal deficits ought to be inflation and employment rather than some fear of default.
First, the FJG. I think this is the most important program that should be implemented as quickly as possible. My ideal FJG would pay a set wage (say $10/hr) which would by default become the new minimum wage. One would be able to enroll in a FJG job and work up to full time and receive standard employment benefits including leave.
It is important to point out that the unemployed/underemployed are already in the ‘public sector’ as they are supported by various government programs. Unemployment itself is a progressively chronic condition with very serious social costs. The point of the FJG is to take currently idle labor and make it productive, priming it for private sector employment. Further, enrollment in the FJG serves as a backstop against economic downturn as enrollment rises during contractions and falls during expansions. The additional wages earned during contractions add to net financial savings of the private sector and fill in the demand gap, helping to alleviate the recession. Businesses paying close wages close to minimum must now compete with the FJG and will do so by increasing wages. While prices will also increase, low-income wage earners will have greater buying power even accounting for these price increases.
The FICA holiday should be phased in slowly with an eye for inflation. As workers see more after-tax income, spending will increase which will also drive up prices. Low income workers would benefit most from this holiday as FICA taxes represent a greater % tax on their total income compared to high earners. Low income workers also tend to spend the greatest % of their income back into the economy so we would see the most economic ‘bang for our buck’ with this tax cut.
Medicare for All may be inflationary or deflationary, it’s not entirely clear. My ideal version would be a robust single-payer system with full coverage for all citizens. Several other countries have implemented this and have better health outcomes at a lower cost. Several studies, including one by the libertarian Mercatus institute, savings of 2–5T on overall healthcare spending over the next decade under a Medicare for All system as opposed to our current one. Yes, the healthcare insurance industry would be destroyed. But there’s no use having an industry that extracts so much value when there is a more efficient alternative available.