The Green New Deal unveiled last week by Sen. Ed Markey (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) is a powerful and ambitious statement. It’s more than just a delineation of the enormous changes that will be required to stave off the most cataclysmic impacts of climate warming. It offers a portrait of the better world we can create by doing so.
Markey and Ocasio-Cortez know this. That’s why the Green New Deal is framed as a joint resolution, not a formal law, meaning even if it passed, the measure wouldn’t bind the government to any new policies. This distinction is key to understanding what the Green New Deal is — and is not — and how to usefully talk about it now. It is a major statement of the Democratic Party’s political priorities. It is not a detailed blueprint of how to get there — or how to pay for it.
The Green New Deal’s agenda, however, is clear: Dramatic action must be taken to avert a climate disaster that will otherwise render much of the world uninhabitable. This is an emergency that deserves immediate attention. Millions of lives are quite literally at stake.
Instead of extreme weather disasters, famines and wars over natural resources, the Green New Deal envisions a future in which our nation overcomes its addiction to oil, gas and coal. The federal government would need so many workers to deploy renewable energy, retrofit buildings to be more energy efficient and construct more durable infrastructure that it could guarantee a job to every American who wants one. Those jobs would pay well and offer union protections. And because climate change touches on every facet of life, the transition away from fossil fuels would happen alongside a rapid expansion of safeguards for Americans already suffering the ill effects of dirty energy, from poisoned waterways to the coal industry’s monopolistic domination of entire regional economies.
One priority the Green New Deal does not include? Balancing the federal budget. Neither the Green New Deal legislation nor an FAQ released by Ocasio-Cortez last week included a detailed set of plans about how to pay for it.
This is as it should be. Anyone who cares deeply about balancing the budget can find a welcoming political home in the arms of billionaire Howard Schultz. Legislation should be crafted to solve social problems. The financial details affiliated with solving those problems are just that ― details ― which can be developed as political circumstances warrant. There is plenty of time between now and 2021 to sort them out.
This was the approach taken during the original New Deal. President Franklin Delano Roosevelt saw fighting the Depression and the Nazi war machine as emergencies that required immediate action. Roosevelt himself liked balanced budgets as much as the next fellow. He raised taxes on the rich repeatedly ― the top rate rose as high as 94 percent during the war. But he didn’t let a balanced budget get in the way of progress. If he couldn’t get enough money from taxes, Roosevelt borrowed it, fighting both the Depression and World War II with enormous federal debts.
And yet among contemporary thinkers, the Green New Deal’s very clear statement of priorities has prompted furious controversy. Noah Smith intones that Ocasio-Cortez is calling for “unlimited deficit spending” that will march America into “oblivion.” Steven Rattner accuses Green New Deal advocates of “intergenerational theft.” Marc Thiessen declares that Ocasio-Cortez has proffered “the neo-socialist lie that you can get something for nothing.” Even Paul Krugman is warning against putting forward ambitious new government programs without levying new taxes.
But Ocasio-Cortez and Markey haven’t advocated for any of these things. They simply haven’t detailed their tax and debt agendas in this particular piece of symbolic legislation.
Not that Ocasio-Cortez has a problem with tax hikes. In case you’ve forgotten, she has proposed a 70 percent marginal income tax rate for the highest-income American households. There is quite a bit of competition in the 2020 Democratic primary field among different programs to tax the rich ― robust new wealth taxes and estate taxes to go alongside higher income taxes. There seems little risk that supporters of these popular tax hikes will suddenly sour on them once they find out they are not included in the Green New Deal’s first piece of legislative text.
In some ways it’s useful to keep these tax and climate discussions separate, at least for the moment. Doing so sets up taxing the rich as an end in itself ― something that should be done for the sake of democratic fairness and accountability, rather than a mere source of funding. According to new research from University of California, Berkeley economist Gabriel Zucman, in today’s America “wealth concentration has returned to levels not seen since the Roaring Twenties.” Billionaires not only can purchase politicians; they can buy their way out of social accountability. Inequality is its own pressing problem.
It is also very likely that even taxing the living daylights out of the rich won’t generate enough money to fund a climate program that gets the job done. And that’s fine. The government runs deficits all the time.
The Green New Deal’s agenda is clear: Climate change is an emergency that deserves immediate attention. Millions of lives are quite literally at stake.
Some of this faux controversy over the Green New Deal comes down to a feud within the economics profession over the rising prominence of a school of thought known as modern monetary theory. MMT began getting a hearing in Washington when Sen. Bernie Sanders (I-Vt.) hired economist and MMT proponent Stephanie Kelton as an adviser ahead of his 2016 presidential run. Ocasio-Cortez has created more buzz for the doctrine by talking it up in interviews with journalists.
MMT is essentially a revival of a tradition of Keynesian economics going back to, well, John Maynard Keynes ― the name is a reference to “modern money” in Keynes’ 1930 book, A Treatise on Money. According to MMT economists, taxes are not really a method of raising revenue for the federal government. The government, they note, raises revenue for itself by printing money. Taxes, instead, are a regulatory tool ― a way to manage inflation, economic inequality and production incentives. MMT doesn’t say the government can or should implement multitrillion-dollar proposals without raising any taxes. It just offers a different rationale for taxes, their uses and their limits.
The window for avoiding climate catastrophe is closing fast. In October, the United Nations Intergovernmental Panel on Climate Change warned that a world just half a degree hotter on average than today’s will lead to at least $54 trillion in damages. That level of warming is all but guaranteed unless world governments not only halt but cut in half surging global emissions and begin removing carbon dioxide already in the atmosphere over the next decade.
A month after the UN report came out, the U.S. government’s own climate forecast predicted up to 10 times as much warming by the end of the century. Intergenerational theft, indeed.