As climate change brings us ever closer to reaching the level of fight or flight that will make an honest evaluation of resource use an imperative we will also have to justify a military that would be the 8th or 9th largest user of fossil fuels if it were a separate country. This alone is going to place us at odds with the rest of the world who are appearing more like the adults in the room every day.
Since the national effort to defeat fascism in WWII involving many sacrifices from Americans, war has become part of our national identity and pride, so the effort is going to meet a lot of resistance. A major component to our success or failure will involve how successfully we can promote that effort as a war because it does rise to that level and more.
The first thing we need to do to realize any of the ambitious goals the left has articulated, including beating climate change, is to throw the old gold standard economic thinking out the window. There is no need to “pay for” everything the government does without a gold reserve to defend. There are many more components in a Green New Deal than simply reducing our carbon footprint. It will require a literal remake of our society and economy that will not be possible if we must claw back every dollar spent with taxation.
The good news is that our monetary system is not even designed to pre-fund spending. In fact, it is impossible to apply tax collections directly to spending, even with Social Security. Taxation does little more than reducing the overall money supply to avoid inflation, and inflation is much harder to induce than is commonly thought. Japan has a debt that is well over 250% of its GDP (ours is just over 100%) and can’t create inflation.
Many economists believe we can increase deficit spending by a factor of 2x for a decade and remain close to the inflation target the Fed sets anyway. However, those projections are based upon a steady state GDP, not giving any benefit to the increased GDP from the added spending, so the potential to spend under inflation targets is even greater and will increase as efficiency benefits from programs, such as Medicare4All, kick in. Such efficiency benefits from green energy production are huuuuuge.
All of the goals and programs being forwarded in the Green New Deal are immensely popular on their own merits, but run into extreme opposition when their funding must be argued before we even get to the programs. This has been the major holdback to our nation’s progress to date and is completely unnecessary. There are 99 reasons to tax extreme wealth accumulation in our economy, but none of them involve “paying for” anything the government spends on. Shifting focus from perpetual war to the war for our survival will present many investment opportunities as well, as will revitalizing the vibrant middle-class America is/was famous for.
