Even in a world where climate change-denying Republicans were swept out of power, there would still be plenty of centrist Democrats convinced that their constituents had no appetite for radical change. The plans are expensive, and getting the budgets approved would be a Herculean effort.
C’mon, you know better than most that constituents are, at best, a nuisance to politicians and that it is their “donors” who have no appetite for any change. Most of the big hitter donors are joined at the hip with fossil fuels and give generously to both parties. If anything, they are probably more lavish with Dems since Republicans are more ideologically in their pockets.
Alexandria Ocasio-Cortez has said that the U.S. version should be financed the way any previous emergency spending has been: by the U.S. Congress simply authorizing the funds, backstopped by the Treasury of the world’s currency of last resort.
This is the only way it can be financed because it is how the federal government finances “ALL” spending. There is literally no mechanism at Treasury for directing tax collections to the general spending account. The dollars used to pay taxes are balanced to zero by the debt and cannot “fund” anything. This mistaken concept of “paying for” federal spending is largely responsible for most of the continuing misery in America and we should probably stop it.
We can start by eliminating Treasury bond issues that support the illusion of debt while only serving as welfare for deep-pocket investors and banks. The US dollar is self-funding by the Constitution which gives Congress the monopoly authority to create it and mandates that it do so “for the common welfare”. Treasury cannot borrow what doesn’t yet exist so “deficit” spending must always precede bond sales.
there is no more reason to let fear about financing halt progress here than there was to let it halt wars or tax cuts.”
There is no “fear about financing” in DC. The currency in Washington is votes for legislation, not dollars unless one is making reference to donations to campaign funds. Most Congresscritters probably can’t balance their own checkbook and only got their jobs because they played on some hot button social issue having little to do with finance. If everyone in America turned white and straight overnight the Republican party would disappear in the next election and the Dems would be clueless about how to actually run the country without “causes”.
My fear is not how to pay for a Green New Deal, but the potential economic damage possible from attempting to pay for it. We never seem to employ the same workers displaced by any technology and green energy is going to do a lot of that. We shouldn’t subsidize what is killing us, but the misconception we can simply divert spending from one industry to another and have everything work out is dangerous.
Projects this big can have unforeseen costs that might be better dealt with by cutting taxes, not raising them. Once the solar panels are in place and the right number of windmills are turning we will essentially have free energy, removing a lot of money from the economy. Displaced workers are going to have to be retrained and provided with healthcare, or simply be allowed to retire with full benefits. We can thin the top executive herd with legal action.
AOC usually advocates for a federally funded, but locally managed job guarantee which would be excellent to use for retraining while preserving workers’ social and job skills. There is certainly no lack of jobs currently going undone for lack of any path to profit, and such a program would be countercyclical to the private sector job market.
If we do the Green New Deal and single-payer healthcare at the same time we had better be prepared to spend a lot of federal dollars without “paying for them”, or we will see a deflationary cycle that will rival the great depression. We could probably buy everyone a new electric vehicle and break even if we spread it out over 10 years, taking the least efficient cars off the road first.
It also calls for a reversal of monetary orthodoxy, with public investment floating green bonds, supported by central banks.
This is hardly a reversal of orthodoxy. If you believe bonds are a “funding” mechanism perhaps you can explain why Social Security benefits are entirely funded from general spending in spite of having $3+ Trillion in bonds. The original purpose of bonds was to remove dollars from reserves to defend the gold reserve until taxation could destroy enough money to offset the deficit spending of Congress.
They are simply useless with a fiat currency and floating exchange rates. The dollars used to purchase Treasury bonds go to pay down the debt, a meaningless tracking number at Treasury, but then must be recapitalized with interest upon maturity. Direct tax credit for green investments would work and keep the money within the private sector instead of draining it out into the complex federal system that has no use for revenue except as inflation control.
It isn’t only the fossil fuel companies who have put their own super profits ahead of the safety of our species for decades; so have the financial institutions that underwrote their investments, in full knowledge of the risks.
The fossil fuel industries pulled a little stunt with profit reporting that makes them almost too big to fail with current orthodox economics. They gave a value to in-ground reserves and moved that to their asset column and shareholder equity. This gives them tremendous leverage over their banks and accounted for some serious share value bumps. You’ll hear a lot about “stranded resources” as this moves forward.
When the global economy enters another downturn or crisis, which it surely will, support for a Green New Deal will not plummet as has been the case with every other major green initiative during past recessions.
I would beg to differ unless the project is well underway and without major boondoggles for conservatives to attack. As long as taxpayers believe “they” are funding their government they will be watchdogs for excessive spending, cutting their own throats in the process. As workers tighten their belts in business cycle downturns they become more aware of how the government spends and are quick to attack any spending they perceive as waste.
I believe that the only way to counter this is with an effort to educate voters about how their economy works and how it is funded by the deficit spending of the federal government. The myths and gold-standard thinking are very well entrenched, even with many “expert” economists and it will require a Bernie type leader to make it work and serve as an example for the future. It would help greatly if we could clone AOC in Congress.
I know you have met Bernie’s econ advisor, Dr. Stephanie Kelton, at conferences. Get to know her and solicit her help with any efforts you make requiring her talents. She is personable and can explain how it all works so that almost anyone can understand if they wish to. Many of her lectures and seminars are in video format on YouTube and serve as excellent reference material. Warren Mosler is the father of Modern Monetary Theory and can be found in the same way. Once you “get it” you’ll have an aha moment and the world of economics will shift 180 for you.
