Thursday, May 30, 2019

Randy Wray — How to Pay for the Green New Deal

How to Pay for the Green New DealWORKING PAPER NO. 931 | May 2019 
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.
New Economic Perspectives
How to Pay for the Green New Deal – Levy Institute
L. Randall Wray | Professor of Economics, Bard College


AXEC / E.K-H said...

Comment on L. Randall Wray’s ‘How to Pay for the Green New Deal’

For the full text (12773 characters) see

Egmont Kakarot-Handtke

Ralph Musgrave said...

Wray advocates price controls and rationing to pay for the GND: a bit dratic. Personally I wouldn't object, but I doubt any party in a democracy could get that past the electorate.

Nebris said...

Maybe spend less money on war? We're at $32 million an hour for that shit.