Green New Deal: There’s a disastrous way to pay for it
Here comes the “Green New Deal” (GND), a bucket list of glitzy proposed legislation intended to eliminate mankind’s needs and worries once-and-for-all. It was proposed by newcomer Rep. Alexandria Ocasia-Cortez (D-NY). AOC, as she’s been nicknamed, and fellow “travelers” are proposing radical new and expensive programs. First, I’ll summarize what GND represents. Then I’ll examine how they may plan to pay for it.
Here are some of the proposals gleaned from the legislation itself, as well as from AOC’s comments: ban fossil fuels; eliminate nuclear energy; eliminate autos; clean energy retrofit for all buildings; virtually eliminate air travel; guaranteed jobs; free lifetime education; ban meat; guaranteed “safe, affordable, adequate housing”; and guaranteed “economic security” for all who are “unable or unwilling” to work.
Presidential hopefuls have jumped on AOC’s bandwagon: Booker, Harris, and Warren, with more to come. These wannabe presidents dare not reject AOC too soon, so they’re standing with a damp finger in the air to detect which way the political wind blows. It’s clear that for many, these ideas are more than aspirational, and the “twenty-something” AOC is effectively setting the current Democrat agenda. If she were old enough to run for President, she’d be a front-runner.
Many progressive democrats fully intend to make good on the GND proposals. Regarding climate issues, Kamala Harris stated: “Of course we can afford it . . . It’s not about cost. It’s about an investment.” Candidate Amy Klobuchar isn’t totally on board, but hedges with this statement: “I think we can get close.”
Regarding the question of how to pay for GND, first we need to obtain accurate cost estimates. Preliminary estimates are surfacing and it’s clear the cost will be in the “tens of trillions” and indications are that all the wealthy people in the country couldn’t pay for it, even if we took all their earnings—at least under conventional economic and tax policies. Do these young progressives have a radical new method of paying for their programs?
GND proponents may be listening to Nobel laureate economist Paul Krugman. He scoffs at those who question our ability to pay for these programs. He recently stated: “To the extent that it’s a public investment program, demands that its supporters show how they’ll pay for it show more about the critics’ bad economics than about the GND’s logic.” Krugman is also on record supporting the highest marginal tax rate being 80 percent.
Do they plan to just print money to pay for it? (Bite your tongue.) I recently read about something called the Modern Monetary Theory (MMT). William Sullivan, writing in “American Thinker,” was connecting these outrageous left-wing spending programs with the MMT theory. He quoted Stonybrook University economics professor Stephanie Kelton proclaiming: “The federal government can afford to buy whatever is for sale in its own currency.” When pressed, Professor Kelton acknowledged that this is, in effect, merely printing money.
Researching this myself, I found that MMT assumes that theoretically, the government doesn’t actually have to pay back the debt because the principal and interest belong to the government anyway. This theory grew from an idea that money doesn’t have intrinsic value, except that which the government chooses to assign to it. Both economists quoted above, Krugman and Kelton, clearly reflect MMT thinking.
I’m reminded of a controversial Obama-era policy. That was when we kept hearing about “quantitative easing” (QE) that was being aggressively pursued. I recall thinking that this policy sounded friendly and harmless—almost therapeutic—but it’s not. In simple terms, QE is a procedure the Fed can use to increase the money supply by flooding the nation’s financial institutions with capital, thereby increasing liquidity. If this action isn’t eventually reversed by reducing that artificial liquidity, this amounts to simply “printing money.” Our money supply is dangerously devalued very quickly. QE clearly reflects one important policy tool of MMT proponents.
The fact that there’s a way to fund much of the Green New Deal must give comfort to its proponents. Given our government’s ability to print money so easily should give the rest of us serious pause. The GND is even more imminent and dangerous than we at first thought.