How to Pay for the Green New Deal

Yeva Nersisyan and L. Randall Wray

Economics Working Paper Archive from Levy Economics Institute

Abstract: This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the "costs" of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as well as shifting resources from current destructive and inefficient uses to GND projects. We argue that financial affordability cannot be an issue for the sovereign US government. Rather, the problem will be inflation if sufficient resources cannot be diverted to the GND. And if inflation is likely, we need to put in place anti-inflationary measures, such as well-targeted taxes, wage and price controls, rationing, and voluntary saving. Following Keynes, we recommend deferred consumption as our first choice should inflation pressures arise. We conclude that it is likely that the GND can be phased in without inflation, but if price pressures do appear, deferring a small amount of consumption will be sufficient to attenuate them.

Keywords: Green New Deal; Keynes; How to Pay for the War; Modern Money Theory (search for similar items in EconPapers)
JEL-codes: B50 E0 E2 E3 E6 H6 Q0 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-ene, nep-env, nep-hme, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.levyinstitute.org/pubs/wp_931.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_931

Access Statistics for this paper

More papers in Economics Working Paper Archive from Levy Economics Institute
Bibliographic data for series maintained by Elizabeth Dunn ( this e-mail address is bad, please contact ).