Is the unemployment rate a political choice?

Wilson Logan made this Freedom of Information request to Bank of England

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Dear Bank of England,

Given that the Bank of England cannot run out of GBP:

https://www.bankofengland.co.uk/freedom-...

and that until full employment is reached there will not be significant inflation:

“An inflation is only possible when more purchasing power is currently offered in exchange for goods and services than there are goods and services to be had at the then price level.

Under such circumstances, if labor and capital are fully employed -- i.e., if production is at capacity -- the additional purchasing power can be absorbed in no other way than by an increase in the prices of the amounts of goods and services then being produced…

If, however, additional purchasing power is thrown on the market while substantial amounts of labor and capital are unemployed, its principal effect is to increase the physical quantities of things produced, rather than to increase their prices”

(US Treasury 1940).

Is it therefore true that the rate of unemployment is a political choice and not in any way an economic or financial necessity?

Yours faithfully,

Wilson Logan.

Enquiries, Bank of England

Dear Mr Logan

We acknowledge receipt of your email dated 5 September below (our ref: CAS-24895-X5Y4J3).
 
We will reply in due course.

Yours sincerely

Information Access Team, Communications Directorate
Bank of England | Threadneedle Street | London EC2R 8AH | +44 20 3461 4878

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Enquiries, Bank of England

1 Attachment

Dear Mr Logan

Please find attached response to your email dated 5 September below.

Yours sincerely

Information Access Team, Communications Directorate
Bank of England | Threadneedle Street | London EC2R 8AH | +44 20 3461 4878

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Dear Enquiries,

Thank you for the link to that informative report.

Sadly, as we are all acutely aware, facts on the ground have changed significantly since that report was written.

We may be looking at 6.7 million people unemployed by Christmas.

Given that monetary policy at the ZLB is utterly impotent at influencing growth in the real economy can I expect you to recommend to Treasury to pursue an expansive fiscal policy funded by either:

A) Sales of the £745Bn worth of accumulated assets.

B) Overt Money Financing.

Yours sincerely,

Wilson Logan

Enquiries, Bank of England

Dear Mr Logan

We acknowledge receipt of your email dated 5 October below (our ref: CAS-25900-F4S2C8).

We will reply in due course.

Yours sincerely

Information Access Team, Communications Directorate
Bank of England | Threadneedle Street | London EC2R 8AH | +44 20 3461 4878

show quoted sections

Enquiries, Bank of England

1 Attachment

Dear Mr Logan

Please find attached response to your email dated 5 October below.

Yours sincerely

Information Access Team, Communications Directorate
Bank of England | Threadneedle Street | London EC2R 8AH | +44 20 3461 4878

show quoted sections