“Let’s Deport Poor People! A Modest Proposal for the Unemployment Problem (with apologies to Swift)”

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0.

In 1729, Jonathan Swift wrote an essay — “A Modest Proposal” — satirically suggesting that the impoverished Irish ease their economic troubles by selling children as food for rich gentlemen and ladies. In that spirit, we would like to assist all governments who claim to be broke and therefore cannot deal with the persistent problem of unemployment.

Last Friday, President Obama warned his fellow citizens at a jobs summit that the government had “limited resources” to deal with the problem. It now appears that this “problem” is not unique to the US. On Sunday we learned that the British Chancellor of the Exchequer (its Finance Minister), Alastair Darling, has warned UK government departments that the money has run out and they face a three-year cash freeze on spending. The cash freeze will mean a “real” cut of nearly £40 billion in spending over three years, according to the Sunday Times of London.

Don’t you just hate when that happens? Governments running out of things they create out of thin air. Never mind that a sovereign government issues its own currency under monopoly conditions, which means it should never run out of that currency. Our friend Bill Mitchell has a theory about this strange phenomenon:

Perhaps all electronic cables between the government and non-government sector might have been cut so that the Government keyboard operators couldn’t credit bank accounts any more…I hadn’t read anything about that in the papers. So perhaps, there has been a terrorist attack on the cables and the Government is keeping it quiet to avoid scaring the population. Then again perhaps all the keyboard operators have quit. But then why wouldn’t they just post cheques directly to the non-government sector. Perhaps they have run out of paper to print the cheques on?

Like Bill, I came to the conclusion that the disease of deficit terrorism has metastasized globally, rendering it virtually impossible for governments with free floating non-convertible fiat currencies to construct adequate demand responses to the mounting crisis of unemployment. Certainly we don’t want any more government spending because, as my critics persistently remind me, that way leads to hyperinflation and Zimbabwe.

Channeling my inner Jonathan Swift, I therefore concluded that our only hope was to devise a sensible supply-side response, so that today’s currently insufficient spending power is more closely aligned to the 85 percent of us who are gainfully employed.

Perhaps we can take a page straight of the UK’s historic playbook. In the old days of the British Empire, many of the country’s criminals were either forcibly press-ganged or deported to Australia. Seeing that Australia today is a vastly more prosperous nation than the UK, it’s highly unlikely that they would readily accept any more convicts. But perhaps we can find some nice island in the South Pacific for the purposes of reducing our national unemployment problems. After all, we’re a civilized people, so we certainly don’t want to resort to the drastic (though cost-effective!) expedient of mass extermination. (Having said that, British Prime Minister Gordon Brown’s plea for “deeper cuts” in the country’s National Health Service caused me to fear that he might go literal and have the nation’s surgeons make deeper cuts on their patients to ensure that more of them die on the operating table to help reduce health care costs).

In any case, our proposal seems both “modest” and in keeping with the current fiscal aspirations of governments globally. We can start with the long-term unemployed. Then the orphans. And maybe empty our prisons, if need be, to create huge savings in our criminal justice system. If the government has truly run out of money, best if it starts pursuing a supply side final solution of reducing their citizenry until the ratio of money to citizens is much more appropriate.

And in the meantime, we can “reward” those who are deported by allowing them to construct a sensible policy: they get to create their own new currency. They will soon learn that their new government, as a sovereign issuer of its own currency, will have all the capacity it needs to create jobs and prosperity. Freed from the shackles of their deficit terrorist leaders, hopefully they will soon learn that their government can provide all of the fiscal resources required to create full employment and prosperity.

It’s a “win-win” for both the deporters and deportees. The logic is Swiftian: my modest proposal will help poor people everywhere “from being a burden to their parents or Country, and For Making Them Beneficial to The Public.”

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  1. BigBadBank

    No, sorry; all agreeable islands in the South Pacific are already full of boat-people who were not allowed into Australia and ex-Gitmo detainees.

  2. MyLessThanPrimeBeef

    At the rate the Fed is hiring coin clippers, we should solve the unemployment in no time.

    By the way, the only resource that is truly inexhuastible is human ego. There is no worry of Peak Ego.

    Finally, the only people we need to deport are shrewd people. We have too many of them already.

  3. fuzed

    Have you not read your Heinlein? “The Moon is a Harsh Mistress.” Setting up the moon colony with the poor will work. What! No Moon colony? Perfect time to make one!

  4. waly

    google search: North American BOAT PEOPLE Detained. AP news agency article — “Quanrantined by Mainland-China Coast Guard.” US ambassabor denies rumors that Homeland Security has off-budget program to help US citizens obtain jobs overseas. (this is fantasy so far.)

  5. Vinny G.

    I think this is a brilliant idea. Deporting lazy and poor people sounds just great.

    But I propose we deport them to Antarctica, with no food supplies or winter clothes. We explain to them that the idea is to have them cryogenically frozen until the economy improves, at which time we promise to bring them back and defrost them in their new beachfront condos at Miami Beach. Of course, this service is free, except for a small processing fee of $499.95, which their wealthier relatives will be liable for.

    It is highly likely the upcoming Republican Congress and Palin administration will approve this in no time at all.


  6. Independent Accountant

    I have channeled my “inner Milton Friedman” for about 40 years. Given our shortage of poor people in the US, we changed our immigration law in 1965 to import tens of millions of them. We do not enforce our immigration laws with respect to Mexico. Welcome aboard!

  7. Anonymous Jones

    Why would you deport them when you can de facto enslave them instead?

    How can you deport them and simultaneously have them cooking your pheasant and emptying your chamber pots?

    This is absurd!

  8. SP


    “Governments running out of things they create out of thin air.”

    Are you daft?

    Maybe, just maybe, what they really mean (and what you are taking literally) is that they are running out of cheap money. There IS not an unlimited supply of resources the govts can draw upon; money IS NOT an actual resource, it represents a claim on real resources that diminishes if the supply is expanded far in excess of actual economic activity.

    Pray tell, why doesn’t Japan just print its way out of deflation if it is so trivially easy? Perhaps rising interest rates would destroy their budget? Destroy all creditors? Generate economic mayhem? Is the cure really better than the disease?

    Respectfully, sir, I believe you are missing something very important here.

  9. Ed

    Actually, European countries like Britain really did use their colonies to export unemployment. If you couldn’t find a decent living in Manchester, you could always come to Australia, South Africa, Canada, and not least the US (before and after independence). Argentina, Brazil, Mexico, Algeria etc. served the same function for other countries.

    It seems strange today, but Europe’s share of the world’s population in the 19th century was much higher than today, and much higher than its ever been historically. Europe was overpopulated. Part of dealing with that was to send excess population to colonies.

    Now there is no more emptied or subjugated territories to send people too, in fact it is the “developing world” that has the most serious excess population problem.

  10. cheeseball

    Nah… haven’t you all heard? If the mutated swine-flu doesn’t do their bidding in reducing the population to some manageable number, the vaccine will!

    Forget deportations… they have a more humane plan!

  11. Nostradoofus

    Governments create money, not wealth, out of thin air. In the short run, wealth is very nearly fixed. Printing money moves wealth around by slicing the pizza into more, and thus smaller, slices.

    Confidence in a fiat currency rests on its stability. Excessive printing undermines stability by making it very hard to predict its future value. How much is excessive? None of us knows. But I suspect we’ll soon find out.

  12. In Debt We Trust

    Well, I have always been a fan of space exploration. If we can just get those *little* logistical bugs worked out, a colony founded by debtors on the Moon or Mars might work out in the long term.

  13. molecule

    Nice try. If you *really* wanted to create jobs you would remove taxes, mandates, red-tape, union rules and other barriers to hiring. First remove the barriers.

    If your theory is correct and the government can just print and spend, what is the point of having Social Security taxes, Medicare taxes, unemployment taxes and all the other fees employers have to pay before they get any output from a new hire? I guess the answer is more government spending, because..why not? What was the question?

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