Sep 22, 2021

How to Pay for the Green New Deal | Levy Economics Institute | Working Paper No. 931

The title mimics that of J. M. Keynes’s (1940) famous book, How to Pay for the War: A Radical Plan for the Chancellor of the Exchequer.
By Yeva Nersisyan and L. Randall Wray / levyinstitute.org
How to Pay for the Green New Deal | Levy Economics Institute | Working Paper No. 931
The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.

Summary:

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.


Download PDF:  http://www.levyinstitute.org/pubs/wp_931.pdf


 

INTRODUCTION

Advocates of the Green New Deal (GND) strive to change the way that we approach a variety of problems facing society: climate change and destruction of our natural environment, rising inequality, and an economy that leaves too many with inadequate access to food, shelter, healthcare, and affordable education. They see these problems as linked, and so insist on tackling them with an array of programs that have hitherto been seen as disconnected: a carbonneutral energy policy and reversing climate change; universal single-payer healthcare; student debt relief and free public college; prison reform; ending “forever wars”; increasing care for the young, sick, and old; and the job guarantee.

 

The advocates of Modern Money Theory (MMT) have similarly sought to change the way that public finance is viewed: the sovereign government’s finances are not like the budgeting by households and firms. Viewed from the MMT perspective, the government uses the monetary system to mobilize real resources and to move some of them to pursuit of the public purpose. Affordability is never an important question for a sovereign government—the relevant question concerns resource availability and suitability. There is thus a natural alliance between MMT and the GND. If we can identify technologically feasible projects that would achieve the GND’s goals, and if we can identify the resources to devote to these projects, then we can arrange for the financing of the programs.

 

Whatever the financial costs, we already have a financial system that can handle them. What is less certain is that we can mobilize the resources that will be required. This will require a combination of putting excess capacity to work and shifting already employed resources away from existing production to GND projects.

 

This paper provides a preliminary attempt to assess whether the United States can meet this challenge (realizing of course that a global response is needed). We will look at the main GND projects and gauge whether national resources would be sufficient to phase them in over the next decade. To do so, we assess the resource requirements and availability. Ideally, we would use a measure of real productive capacity—the ability of a resource to produce output—but as we have heterogenous resource inputs and heterogenous outputs, this is impossible. We will have to work with dollars of spending to determine the amount of resources required for the GND, and hence the amount of resources that need to be mobilized by a combination of shifting them from other uses and moving them from unemployment (broadly defined—that is, not limited to the official measures of unemployment).

 

In this, we follow the method used by John Maynard Keynes in his proposal offered to the Chancellor of the Exchequer on the eve of WWII: How to Pay for the War. The approach is simple but also profound: total the resources available to prosecute the war while meeting the consumption needs of the population. If the available resources fall short of what is needed, the solution cannot be found in the finances. Government can always spend more to shift resources to the war effort; if consumption spending is not reduced, the result is inflation that generates a combination of “voluntary” saving and excess profits as real consumption falls. To prevent this undesirable outcome, government must reduce consumption demand by some combination of voluntary saving, taxes, deferred compensation, rationing, and wage and price controls. To be clear, the purpose of these actions is not to provide government with the financial means to “pay for” the war effort but rather to relieve pressure on scarce resources.

 

In recent weeks, many supporters and proponents have warned that large—perhaps confiscatory—tax hikes will be needed to “pay for” a GND. They typically warn of the high financial costs, and hence of prospective dangerously high government deficits if taxes are not raised to “pay for” the GND. In our view, these arguments are beside the point. What is required, first, is a careful accounting of the resources that can be made available and to weigh those against what will be needed. Only then should we address the question of whether taxes and other means might be needed to reduce income and private spending sufficiently to avoid inflation as the GND is phased in.

 

Hence, in this paper we borrow Keynes’s approach to assess resource availability and needs. We largely follow his method, which is to mostly use monetary measures (dollars in our case) as proxies for resource quantities. The estimates can provide only a very rough guide. Uncertainties remain concerning the technologies, the quantity of resources needed, the suitability of the resources that can be made available, the political feasibility, and the capacity of our democracy to successfully face the challenges ahead. But we believe that our approach provides more guidance about the question of the GND’s “affordability” than does the conventional approach that merely adds up the dollar “costs” of GND projects to obtain huge and scary numbers.

 

As Keynes put it, his proposal would “snatch from the exigency of war positive social improvements” (1940, iii–iv). Not only would it move the necessary resources to the war effort with a minimum amount of inflation, it would also make “an advance towards economic equality greater than any which we have made in recent times. There should be no paradox in this. The sacrifices required by war direct more urgent attention than before to sparing them where they can be least afforded.” This turned out to be a prescient description of the social and economic conditions of the postwar democracies—the build-up of productive capacity (as well as the increase of the private sector’s financial wealth held in the form of safe treasury bonds) provided the base for the postwar expansion that many refer to as the “Golden Era” of capitalism. The GND promises a similar outcome, as the benefits go far beyond the reversal of climate change: they can also lead to environmental sustainability, greater equality, shared prosperity, jobs for all, healthcare for all, childcare for all, and an end of the forever wars. In order to build the necessary political consensus that will be required to win this battle, we need to ensure that whatever sacrifices might be required in the decade or so over which the GND is implemented will be more than compensated for by tangible benefits.

 

THE BIG MEOW: CAN WE AFFORD THE COSTS OF AVOIDING ANNIHILATION?

We must approach the Green New Deal as the real MEOW—the Moral Equivalent of War. (As opposed to Jimmy Carter’s baby kitten meow—his “moral equivalent of war” on inflation—that saw the inflation sparked by OPEC’s price hikes as an existential threat to American democracy.) Climate change really does threaten the very existence of human life on this planet. But advocates of the GND recognize that this is not the only threat we face, as discussed in the introduction.

 

To be sure, some naysayers reject science; others claim we just cannot afford to mount the effort required to reverse humanity’s steady march to oblivion. We will just have to settle for small, incremental change and hope for luck or divine intervention to supplement our meager efforts. Or look to colonization—of Mars?—as a way to preserve a select few representatives of the civilization of homo sapiens in a human zoo waiting for discovery by more advanced life forms that managed to avoid self-annihilation.

 

How can we possibly weigh the costs of failure against the financial costs of the greatest effort we could mount to give us some chance of survival? Even very small increases of average global temperatures will generate large financial and human costs (just a half of one degree of warming above today’s average will increase the costs of global damages by $54 trillion [Carter and Kaufman 2019]); as we delay action to prevent this, the costs mount rapidly, and the chances of survival diminish. It is usual in economics to discount avoided future costs (in this case, the costs of delaying action) to compare with today’s costs (spending on a GND). But that makes little sense in the case of climate change. The costs of extinction of the human species— from the point of view of humans, at least—is beyond measure. Even if we calculate the costs of the GND as $93 trillion (as one hysterical estimate puts it) over the next decade, that is puny in comparison with the discounted cost of total destruction of human life on planet Earth.

 

Some would quibble that we are not absolutely certain that climate change will extinguish all human life. Perhaps some humans (and other life forms) could adapt sufficiently to survive cataclysmic change. The uncertainties involved are tremendous—greater than any ever faced by humans, at least since they came out of Africa. Even with our best efforts, we might fail, but why would we not mount our best efforts? A more prudent approach is to listen to science and to map out a strategy that would provide some chance of survival even under the worst climate change scenario.

 

If we think about America’s biggest challenge over the past century, it is reasonable to point to the combination of the Great Depression and the rise of global fascism in the 1930s. To counter those, we created the New Deal and ramped up military strength. The economic cost of lost employment and output during the 1930s was huge. The benefits of New Deal programs that helped to get the economy back on track almost certainly exceeded the spending on those programs—but we have to admit that we cannot accurately tally up the net benefits gained because we cannot know how the economy would have recovered in the New Deal’s absence. In any event, most would agree that it was prudent to tackle the crisis rather than wait any longer—even if we cannot be sure of the net ex post benefits of action over inaction.

 

War spending plus the New Deal reforms led to an unprecedented increase in the size of the government and its deficit (government spending reached a peak of half of GDP, and the deficit reached 26 percent of GDP in 1943 [Spross 2016]). Can we compare that to the alternative, which might have been global domination by fascism, including elimination of the United States and western democracy? It was only WWII that freed the government’s budget on the necessary scale. This was justified on the basis that there was no alternative—either global subjugation to Nazis or “whatever it takes” (to borrow a phrase) spending. We chose survival. We learned that “taxes for revenue are obsolete,” as Beardsley Ruml (1946) put it. And we came out of WWII stronger and richer than ever before. Some of this was thanks to the New Deal institutions as well as the infrastructure created in the run-up to the war; some of it was due to industrial might created by the war machine; and some of it was due to the good wages and benefits on which economic growth could be sustained after the war. It is preposterous to think that we should have just surrendered in order to forego the financial cost of the war.

 

The task ahead of us is bigger. The stakes are higher. The future of humanity lies in the balance. Half measures will not do. It might take all our available resources—and then some—to win this battle. The experts say we have most of the technology we need. We have unused resources to put to use. We can shift others from destructive uses to be engaged in constructive endeavors. We can mobilize the population for greater effort with the promise of greater equality and a shared and sustainable prosperity. We can make a good effort. We might win.

 

First, we have to shake off the neoliberals who have been destroying our country and our world for more than two generations. They began in 1974 with the argument that an overspending government caused inflation and that too much regulation and coddling of unions caused unemployment and slow growth. In reality, OPEC caused both of our high inflation periods (early and late 1970s), and the adoption of austerity to fight oil price hikes slowed growth and led to unemployment, which, together with inflation, was known as stagflation. Union-busting weakened our middle class, real wages stagnated, and we entered an era dubbed secular stagnation. Deregulation—especially of finance—led to bubble and bust cycles that redistributed income and wealth to the tippy-top while the bottom 90 percent was buried in debt.

 

The correct policy then—and now—was conservation and conversion to alternative energy sources. Instead, we got austerity and ramped-up dependence on climate-killing carbon. Neoliberals want to continue with the same old policies: more fiscal austerity; more reliance on markets (carbon trading—that is, using the price system to try to resolve a problem created by the price system); more half measures; and more of President Carter’s meow.

 

At least part of the justification for half measures is that the GND is just too expensive. Our government is already broke. We simply cannot afford survival. But MMT teaches that financial affordability is not the question; we can afford the real MEOW. We already have the financial wherewithal needed to afford whatever is technologically possible. We do not need to go hat-in-hand to rich folks to get them to pay for it. We do not have to beggar our grandkids to pay for it. We do not have to borrow from China to pay for it. We do not have to get the Fed to “print money” to pay for it. All we need to do is to remove the self-imposed constraints, the myths, and the misplaced morality; then budget for it, approve the budget, and spend. No new spending process is required. Follow the normal procedures that the Fed and Treasury have developed. That is how you pay for it.

 

As the great J. Fagg Foster (1981) said, “Whatever is technologically possible is financially feasible.” There is really no other reason to have a financial system. If you know how to build houses but your financial system cannot find a way to make them affordable, then you must replace that system with one that will.1

 

1 We did that with the New Deal’s creation of the self-amortizing mortgage loan and associated institutions: the Federal Housing Administration, the Federal National Mortgage Association, and the Home Owners’ Loan Corporation. Wall Street’s twenty-first century model created a financial system that put housing out of reach for average Americans. We need Jimmy Stewart.

 

It is possible that we will need to constrain domestic consumption in order to release resources for the GND effort in a noninflationary manner. The problem is not that we cannot financially afford the GND—government can always bid resources away from private use by paying higher prices—but spending on the GND will generate private income that can support higher bids in competition with the government for scarce resources. This is the real reason that tax hikes might be desirable: to reduce private income and thereby remove competition for resources.

 

REAL RESOURCES AND INFLATION (OR, AFFORDABILITY: THE MMT APPROACH)

Moving forward, the most important question concerns the resources we can make available. There is some danger of inflation, not because of the manner in which the GND will be financed, but because of potential pressure on resources. Can we constrain the inflation pressures as we implement GND projects?

 

The more sensible critics of MMT accept the argument that we can financially afford the GND, but insist we need to raise taxes more or less in line with spending to avoid causing inflation. They go on to assert that increasing spending without raising taxes is a particularly dangerous practice as it injects excess money into the economy that will cause inflation. For instance, Brad DeLong has argued that it is unreasonable to believe that “the US can have Swedish levels of government spending without Swedish levels of taxation.”2

 

2 See Wray (2019). DeLong is wrong. American workers already pay Northern European levels of “taxation” if you use an inclusive measure: all the mandatory deductions from American paychecks (pensions and health insurance, including the Obamacare mandates, called “non-tax compulsory payments,” or NTCPs) add up to a greater burden than what our rich peer countries’ workers pay. For comparison purposes, Canadian workers pay an effective “tax” rate (including NTCPs) of just 11.5 percent; in Denmark they pay 26.7 percent; in Norway 32.4 percent; in Sweden 38.3 percent; and in the US a whopping 43.2 percent (Bruenig 2019). In sum, we already pay higher taxes than the Swedes; we just don’t call them taxes, even though they are as mandatory as Swedish taxes. Take-home pay of Americans is already below that of Swedes, which is obvious to anyone who travels to northern Europe to envy the standard of living we do not enjoy.

 

This position presumes that, first, implementing the GND will lead to a large increase in the demand for resources, and, second, that raising taxes is the best way to relieve pressure on demand. We believe that those arguing for tax hikes have not carefully assessed the inflation potential of the GND. Indeed, there has been no analysis/study of the GND that looks at resource demands and savings. Those arguing for tax increases have little basis for making such claims, as they have summed the dollar estimates of costs of proposed GND programs and presumed this equates to additional government spending that requires taxes to “pay for” it.

 

As we will demonstrate, whether or not we need tax hikes depends on the net increase of demand on the nation’s resources arising from implementation of the GND’s project—and not on some scary prediction of trillions of dollars of government red ink. It is not a foregone conclusion that the net increase will be beyond our capacities. First, we have substantial unused capacity. Second, the GND will in many areas reorient resource use, cutting environmentally and socially destructive uses of resources and shifting them to better use. Third, we will, along the way, increase capacity.

 

If we tackle climate change as the moral equivalent of war, and if this really does take us to and beyond full employment of resources, we can adopt measures to counter inflation pressure. No one has a vested interest in high inflation, in spite of what the inflation worriers want us to believe. Knowing that that is the real danger, we can formulate a strategy to prevent it. We can work together to put all our resources into the effort without stoking inflation.

 

This will be difficult, but we have done it before. WWII was our first major war that was not accompanied by high inflation. That provides some guidance. In addition, Keynes’s How to Pay for the War provides a plan for action. So the real question is this: How can we reduce private resource use to release resources to be used in the GND efforts in order to avoid competitive bidding up of prices that results in inflation? And, more specifically, how can we move the appropriate quantity and types of resources to the GND?

 

WAR PLANNING AND THE GREEN NEW DEAL

We provide a first attempt to quantify the net resource demands in order to obtain some idea of the reduction of current aggregate private demand (consumption and investment) that might be required to release resources to the GND efforts—that allows us to deal with what would otherwise create an inflationary excess demand. The main contribution we want to make in this paper is the argument that in assessing economic feasibility of the GND, we need to be focused on technological know-how and resources, not on the dollar costs. By themselves, the dollar costs do not provide useful information. There is no question—at least there should be no question—about the financial feasibility of spending even $93 trillion (the ridiculous estimate bandied about to scare the population) as the American contribution to a global mobilization to restructure our economies so that civilization might survive.

 

Our analysis (and the MMT approach in general) is in line with Keynes’s approach to economic planning for WWII as explained in How to Pay for the War. Keynes rightly believed that war planning is not a financial, but a real resource problem. The issue was not how the British government would be paying for the war, but rather whether the country could produce enough output for the war effort while leaving enough production to satisfy domestic civilian consumption (plus exports, less imports). To estimate the amount available for civilian consumption, we would need to determine the maximum current output we could produce domestically, how much we could net import, and how much we needed for the war effort.

 

While in normal times we operate with significant underutilization of capacity, during the war, Keynes (1940, 17) argued, we move from the “age of plenty” to the “age of scarcity,” since what is available for consumption is relatively fixed (assuming growth of output would go to the war effort). At the same time, more output produced for military purposes means more income, which, if spent on the goods available for consumption, would simply push up prices. Hence, some of the purchasing power would need to be withdrawn (through taxes or deferred consumption) to prevent inflation. Thus, Keynes rightly viewed taxes as a tool for withdrawing demand, not paying for government spending.3 He thought taxes could be used to withdraw half of the added demand. The other half would have to come through savings, voluntary or “forced.”

 

Keynes thought the voluntary savings approach would only work if everyone saved enough, which could not be guaranteed. If households did not save enough, spending some of their increased income, they would simply bid up prices. As a consequence, they would consume the same amount of resources, but pay more of their nominal income for it. The business ”profiteers”4 would get a windfall income, a portion of which they would save and a portion of which would be taxed away (so businesses would act as tax collectors for the Treasury, taking away even more of worker income than what had been already taxed).5 Thus, through the voluntary savings approach, saving and taxes would still withdraw demand, but on the backs of workers. If workers demanded and got higher wages, the process would simply repeat itself, with workers trying to consume more and pushing prices even higher. Wages would be constantly playing catch-up with price increases, with workers still consuming the same amount of real resources.

 

Keynes’s preferred solution was deferred consumption. Instead of taxing away workers’ income, which would prevent them from enjoying the fruits of their labor (and possibly reduce support for the war effort), he proposed to defer their consumption by depositing a portion of their wages in “blocked” interest-earning deposits.6 This solution would avoid inflation, while at the same time more evenly distribute financial wealth toward workers. Furthermore, this would solve the problem of the slump that would likely follow the war, as workers could increase their consumption after the war at a measured pace, spending out of their deferred income.

 

3 As Keynes (1940, 61) argued, “A Government, which has control of the banking and currency system, can always find the cash to pay for its purchases of home-produced goods.” The problem comes after the government has purchased them: “the Government’s expenditure necessarily remains in the hands of the public … the Government having taken the goods, out of which a proportion of the income of the public has been earned, there is nothing on which this proportion of income can be spent.” And if it is spent, it will drive up prices (without increasing real consumption) — which moves that income to profits and taxes.

4 Keynes noted that he intends no insult in his reference to “profiteering”—the extra spending must either go to profits or taxes, given that the supply of consumer goods is fixed (Keynes 1940, 64).

5 As the tax rate on profits would be higher than that on wages, the “profiteers become, so to speak, tax-collectors for the Treasury” (Keynes 1940, 65).

6 What he describes is something like individual retirement accounts allowing early withdrawals for emergencies (loss of job, illness, support of dependents) that would amount to approximately 20 percent of wages, with the deferred rate progressive, such that lower-income workers receive a higher deferred payment in the future relative to wages. To reduce the burden on lower incomes, he would provide a progressive family allowance. He suggests it would work like the social insurance system. Below, we will recommend a proposal that would tie the deferred compensation to Social Security.

 

Keynes recognized that it is not easy for a “free community” to organize for war. It would be necessary to adapt the distributive system of a free community to the limitations of war, when the size of the “cake” would be fixed. One could neither expect the rich to make all of the necessary sacrifice, nor put too much of the burden on those of low means. Simply taking income away from the rich would not free up a sufficient quantity of resources to move to the war effort—their propensity to consume is relatively low and they have the ways and means to avoid or evade taxes. But taking too much income away from those with too little of it would cause excessive suffering—especially in light of the possibility they would face rising prices on necessities.

 

To avoid a wage-price spiral, labor would have to agree to moderate wage demands. This would be easier to obtain if a promise were made that workers would not be permanently deprived of the benefits of working harder now. In other words, the choice facing workers is to forego increased consumption or to defer it. They should understand that the inflation tax is the most burdensome alternative—it shifts excess spending to profits generation. Instead, in return for working more now, they would be paid more later, accumulating financial wealth in the meantime.

 

He recommended three principles to guide war planning: (1) use deferred compensation to reward workers; (2) tax higher incomes; and (3) maintain adequate minimum standards for those with lower incomes such that they would be better off, not worse off, during the war. When the war ends, the deferred compensation would be released in installments, meant to be timed with the slump that would follow the war. The system would be “self-liquidating both in terms of real resources and of finance” (Keynes 1940, 46). As resources were withdrawn from the military sector, they could turn to civilian production, with the deferred compensation providing the income needed to purchase that output. (Keynes [1940, 48] also recommended a capital levy equal to the liability of the deferred compensation—“if public opinion still feels a difficulty here,” he wrote—to allay fears about the public debt. It would “bring in an amount sufficient to discharge the liability in respect of Deferred Pay.”)

 

MOBILIZING RESOURCES FOR THE GND

Keynes also recognized that in preparation for war we can increase the level of output by employing the unemployed, underemployed, or those out of the labor force. This is as true today as it was in Keynes’s time. In the neoliberal era, we chronically operate below full employment. That is obvious in Euroland, which is probably operating 25 percent or more below full capacity. Even the US today has substantial excess capacity, in spite of claims that we have achieved full employment. Over the past quarter century, we have had to readjust our estimate for the natural rate of unemployment—the rate below which inflation is supposed to pick up— in every recovery, because inflation never arrives as unemployment falls. Most recently, in the immediate aftermath of the financial crisis, economists claimed that the natural rate of unemployment had increased to over 5 percent. Yet, the unemployment rate kept coming down, while inflation never materialized. We will not know precisely where the inflation barrier is until we ramp up aggregate demand.

 

Further, there is nothing “natural” about potential growth. We can raise our potential by prudent investments of our resources. Operating close to full capacity over a period will bring forth investment and more capacity—so potential output is to some degree determined by actual capacity use. For a number of years following the global financial crisis, the Congressional Budget Office had to continually adjust its estimates for potential GDP downward as depressed demand conditions discouraged investment. (Decades of subpar growth have reduced the incentive to invest in augmenting capacity, something GND spending can help reverse.) Hence, our economic potential is positively impacted by robust actual growth, or negatively impacted by subpar growth.

 

Through the GND, we will also shift resources to better uses and (gradually) reduce the need to devote resources to dealing with the problems created by destructive processes (dirty production processes require us to devote resources to cleanup; high inequality forces us to devote resources to dealing with the consequences of poverty, idleness, inadequate access to preventive care and early treatment, social isolation, and crime).

 

However, we will need well-targeted spending to do all this without sparking inflation. There is no doubt many sectors of our economy really are at full capacity today. Others lag far behind with substantial excess capacity. The same can be said for parts of our labor force. For example, even with low unemployment rates, labor force participation rates for prime-age males have been on a long downward trajectory (since the early 1970s, when neoliberalism began to take over policy. See Dantas and Wray [2017]).

 

The GND will move the economy to full employment of resources. We need to be very careful to direct as much GND spending away from the sectors that are already at or beyond full employment—which tend to be the most advanced sectors, with oligopoly or monopoly pricing. Wages and prices in these sectors could rise and boost measured inflation rates. That is precisely what we want to avoid. In spite of the conventional wisdom, rising tides now raise all yachts—not the little dinghies. As Pavlina Tcherneva has clearly demonstrated, over the entire postwar period the share of income growth grabbed by the richest households during economic expansions has increased. Almost all the gains from growth now go to the top—with roughly 80 percent of income growth captured by the top 10 percent of the distribution (Tcherneva 2017). Where possible, we need to prioritize spending to the underutilized resources, and we need to counter the tendency for growth to disproportionately boost income and spending at the top. Where we cannot avoid competing for already employed resources, it could become necessary to use wage and price controls along with rationing.

 

While Keynes (1940, 51) argued that “some measure of rationing and price control should play a part in our general scheme,” he argued that these methods should be secondary to taxes and deferred compensation as a way to control inflation. Rationing impinges on consumer choice and inevitably has differential impacts across individuals. Price controls can create shortages. In any case, he argues that an effective program of deferred income will make rationing and price controls easier to implement.

 

To sum up, we need to obtain an inventory of the resources that can be made available to the GND projects to compare with the resources that will be required to implement the GND. This would include resources in excess supply plus those that can be released from uses that will be eliminated by adoption of the GND. This is the true “cost” of the GND, and it will allow us to get some idea of the magnitude of the reduction of aggregate demand necessary to avoid inflationary pressures. Admittedly, this is difficult, and we are only providing a first step: using gross measures of underutilized resources currently available, resources that can be shifted, and resources that will be needed by GND projects.7

 

7 In this paper, we do not assess the technological feasibility of the part of the GND that is focused on reversing climate change. We will assume that the science and technology exist. We have no expertise in that area. Instead, we focus on resource availability.

 

It is interesting to take a quick look at inflation during WWII in the US and the UK, both of which adopted a variety of anti-inflation policies.

Table 1.  Inflation in the US and UK (percent)

Year US inflation rate UK inflation rate
1939    -1.4    2.8
1940    0.7    16.8
1941    5.0    10.8
1942    10.9    7.1
1943    6.1    3.4
1944    1.7    2.7
1945    2.3    2.8
1946    8.3    3.1
1947    14.6    7.0
1948    8.1    7.7
1949    -1.2    2.8

 

In both countries, the early transition to a war economy generated substantial inflation, which was rapidly reduced over the next few years. Inflation again accelerated in the transition back to civilian production. By contrast, the UK’s inflation had run much higher during and immediately following WWI: 15.40 percent in 1920; 10.10 percent in 1919; 22.00 percent in 1918; 25.20 percent in 1917; 18.10 percent in 1916; 12.50 percent in 1915; and -0.30 percent in 1914. As Keynes argued, the British method of provision for WWI had consisted of “a sufficient degree of inflation to raise the yield of taxes and voluntary saving to the required level” to reduce the share of output going to consumption. By his calculation, the cost of living rose an average of 20–25 percent over the course of the war, with wages rising only about 10 percent per year in the first half of the war and by 30 percent in the second half. Thus, the wage hikes tended to match price hikes, but with about a one-year lag. This allowed a permanent reduction of consumption by workers that was sufficient to shift resources to the war. By contrast, both the US and the UK managed to contain inflation pressures much more successfully in WWII. (We return to this discussion at the end of the paper.)

 

“COSTING” THE GREEN NEW DEAL

The American Action Forum (AAF), led by the former Director of the Congressional Budget Office Douglas Holtz-Eakin, is the source of an oft-cited GND cost estimate of $93 trillion. The authors of the report admit, “the breadth of the proposals suggests that there will be large spillovers among them, as well as macroeconomic impacts. This would imply that an ideal analysis would be to consider them simultaneously” (Holtz-Eakin et al. 2019). And although they simply do a policy-by-policy analysis for each of the components of the GND, it has not prevented the opponents of the GND from adding all the financial “costs” of the various programs and latching on to the $93 trillion number to argue that it is wishful thinking at best and a terrible policy that will bankrupt our grandchildren at worst.

 

What we do here is what Holtz-Eakin and his coauthors fail to do. We consider the resource savings that will accrue from the various programs, as well as the resource costs of GND programs, to determine whether at the end of the day the GND would be affordable in terms of the available real resources. As we demonstrate, some parts of the GND are resource-creating and it is highly misleading to simply tally the projected dollar costs.

 

For example, we note that the highest “costs” from the estimates of the GND accrue due to the “economic agenda,” including the job guarantee (JG) and the expansion of Medicare, which together are supposed to cost between $42 trillion and $81 trillion. As we will show below, both of these programs mobilize resources for the other components of the GND. As such, it makes no sense to count them as net costs to be summed to obtain a number like $93 trillion.

 

To be clear, we do recognize that implementation of the GND will shift spending from the private sector to the government sector. However, unless there is an a priori reason to believe this would—by itself—be inflationary, we take the position that in the general case it makes no difference in terms of inflation whether the dollar spent to hire resources comes from the government or from the private sector, which is also the method used by Keynes. As Stephanie Kelton says, cash registers do not discriminate. Indeed, as we report below, there is strong evidence that at least in the healthcare sector a dollar of government spending buys more care than a dollar of private spending—so shifting toward government as the single payer would produce disinflationary pressure.

 

Further, in what follows we do not assume that we need to raise taxes simply because government spending rises. The position we take is that taxes should be raised to fight inflation that would result from excess demands on resources. We would not raise taxes merely to balance spending with tax revenue. If more spending does not generate inflationary pressure, we do not need to raise taxes. In any event, we argue below that tax hikes are not necessarily the best way to counteract inflationary pressures should they arise.

 

The JG Path to Jobs for All: And a Source of Resources for the GND

The GND endorses full employment through a JG program: a true full employment platform where anyone who wants to work has access to a paid job. The JG has always been an important part of MMT. We have long argued that running up aggregate demand to try to achieve full employment would probably cause too much inflation long before the goal of full employment was reached. Instead, MMT relies on the JG to do the heavy lifting.

 

The program offers a basic wage and provides a GND job to anyone willing to work. This operates like a commodity price support program, ensuring wages do not fall below the program wage without competing with the private sector to push wages higher. Private employers can always recruit from the pool if they need workers, paying at least the (new) minimum/program wage.

 

While there are many JG proposals floating around, the Levy Economics Institute proposal is perhaps the most ambitious (Wray et al. 2018). Since some might not be familiar with the details and goals of the proposal, we will examine the Levy Institute’s version in some detail before proceeding to evaluate the costs of the GND. The Levy proposal includes paying $15 per hour (consistent with the GND’s call for a national minimum wage of $15 per hour) plus generous benefits (at 20 percent of the wage bill, including Medicare-style healthcare and free childcare), plus an amount of spending equal to 25 percent of the wage bill to cover materials costs. Thus, the JG not only provides full employment, it also ensures an effective national minimum wage of $15 per hour—and this is accomplished whether or not this is the legal minimum.8

 

The Levy simulation of the JG puts the net annual impact on the federal government’s budget at around $400 billion per year for the first 10 years; state budgets improve by $53 billion annually. The boost to GDP is around $560 billion annually, while the boost to employment is around 19 million new workers (15 million in the program, plus 4 million private sector jobs). These are high estimates, since the Levy simulation does not include likely cost reductions, such as lower spending on social programs and the penal system that would result from poverty reduction through job creation.9 What is important here is the possible impact on inflation, not the budgetary impact on the federal government. However, the net $400 billion boost to federal government spending (with the caveat that the report does not attempt to calculate all savings on other government programs) means that aggregate net wages have been increased by about that amount. Since wages will be largely spent, that directly boosts aggregate spending. Including the “multiplier” impact of private job creation, we arrive at something more than half a trillion dollars of greater income and spending, much of which represents a demand for consumption goods.

 

8 Without a JG, a legal $15 minimum wage may not be an effective minimum wage, because those who cannot obtain a job in the formal labor market will not receive that wage (they might remain unemployed or be forced to work in informal labor markets at less than the minimum).

9 We assumed some budgetary savings from lower Medicaid spending and reduction of the Earned Income Tax Credit—as program workers would have higher incomes that would raise them above program thresholds.

 

However, the impact on inflation according to the Levy report’s simulation (using the Fair model) is negligible—even though it would increase employment and GDP and would raise the effective minimum wage to $15 per hour across the country. In the most inflationary simulation, it finds that inflation would peak at just 0.74 percentage points above the baseline, and then would fall quickly to just 0.09 percentage points above the baseline by the end of the 10-year period used in our study.

 

While some have added the “costs” of the JG to the total GND costs, this presumes that the JG supplies no resources to the GND. While in financial terms the JG represents a cost, in real terms it is a source of resources. In particular, JG workers can be employed for many of the GND projects: infrastructure (installation of insulation and solar panels), environmental (tree planting), and care of individuals and communities. In other words, the JG is both a GND cost (it uses resources—mostly the consumption out of wages by employees) and also a source of resources for GND projects. However, its direct employment of labor resources is almost entirely of those that are not currently being used by the private sector. An important point is that we should not double count this cost as we total up the resources needed for the GND—it is both a cost and a source of resources.

 

In the most optimistic scenario, the JG’s workforce would be entirely committed to GND projects. If we assume that three-fourths of the simulated boost to GDP ($560 billion*0.75=$420 billion annually) is attributed to GND employment (and assume the rest of the addition is due to increased private sector employment), we have over $400 billion worth of GND project work performed by JG workers (equal to the net budgetary impact, which, again, is important to the extent that it stimulates additional consumption).

 

By design, JG projects would be able to utilize labor with below-average skills and experience (to ensure most workers could find suitable work); the jobs would also be labor-intensive so that they would not require expensive capital investment or materials. As the Levy report explains, these would include care services (care for the environment, community, and people) plus small construction and retrofitting projects (making homes more energy-efficient, for example). Clearly, these workers would not be used as skilled labor in major infrastructure projects, which will be a core component of the GND.10 Hence, the JG workers would be used only in a subset of GND projects.

 

10 In our report (Wray et al. 2018), we discuss the importance of respecting prevailing wage legislation and avoiding competition with union labor. Further, most public infrastructure projects will continue to be undertaken through contracts with private firms—hence, would not be performed by the JG program.

 

Also note that Medicare-style healthcare as well as childcare coverage is included in the Levy simulation of a JG program with 15 million employed. JG projects would include employment of JG workers in childcare provision (provided to families of JG workers and others). And our estimate of program cost includes healthcare coverage. Hence, when calculating the resources required both by childcare coverage and universal healthcare, we should avoid double-counting, since those benefits have already been included for the 15 million JG employees.

 

We will assume that by directing most of the JG workers to GND projects, the potential supply of resources available is 2 percent of GDP (the net budgetary costs). However, let us assume that only half of these resources are devoted to “greening” projects; the other half are devoted to what Tcherneva calls “care for community” and “care for people” projects: service projects related to senior and youth care, teacher’s helpers, neighborhood and park cleanup, artistic projects, and so on. Thus, the JG program can provide resources needed for green projects in an amount equal to 1 percent of GDP (and resources equal to another 1 percent of GDP for other care services). These would largely be in upgrading buildings and homes to improve energy efficiency, although some could be used in nontechnical maintenance of energy projects (landscape maintenance, for example).

 

For the purpose of totaling up resource availability and use, we will count the JG as using an amount of resources equal to 2 percent of GDP. However, we count it as supplying an amount of resources for green projects equal to 1 percent of GDP—hence, the net cost in terms of resource use is 1 percent of GDP. (We have chosen not to directly count the contribution of JG workers in “care” services as a net resource because—as discussed below—we do not include an estimate of the resource costs of the care services. Thus, we are assuming that the JG care services essentially “pay for themselves” in terms of resource use; however, the JG care workers will consume 1 percent of GDP, so they are treated as a GND resource cost.)  We now turn to other components of the GND.

 

Renewable Energy and Energy Efficiency

The AAF estimates that “to transition to a power sector that has net zero emissions of greenhouse gases in 10 years would require capital investment of $5.4 trillion by 2029” (HoltzEakin et al. 2019). For states without nuclear moratoriums, the renewable energy mix would be 50 percent nuclear, 50 percent wind, solar, hydro, geothermal, and battery storage; for states with moratoriums, it would be 100 percent wind, solar, and storage. Adding another $200 billion per year (a midpoint estimate) for a net zero emissions transportation system and $290 billion (a midpoint estimate) per year for greening the housing stock,11 we would need $1.03 trillion, or 5.3 percent of 2017 GDP annually.12

 

          Recap using AAF: Power net zero greenhouse emission   $540B annually 
                           Net zero emissions transportation    $200B annually 
                           Guaranteed green housing             $290B annually 
                           Total                              $1,030B annually 
                           Percent of GDP                      5.3%

 

Milton Ezrati, writing for Forbes, offers his own estimates for the various components of the GND, citing different sources (Ezrati 2019). Here we only use his estimates for “greening” projects. Based on estimates by physicist Christopher Clark, the cost of expanding renewable energy to 100 percent would be $2 trillion over 10 years. The smart power grid would cost an additional $400 billion over 10 years (estimate from the Electric Power Institute).13 Upgrading and retrofitting buildings would cost between $2.5 trillion and $3.9 trillion ($3.2 trillion midpoint estimate) over 10 years. The total cost of greening projects comes to $5.6 trillion over 10 years ($560 billion per year, or 2.87 percent of 2017 GDP). 

 

11 Their estimates over 10 years range from $1.3 trillion to $2.7 trillion for the net zero emissions transportation system and $1.6 trillion to $4.2 trillion for guaranteed green housing. We use midpoint estimates for both.

12 Note that in our calculations of annual costs we do not account for inflation—what matters is resource use, not nominal cost. Since we are reducing costs to percent of GDP, we presume that annual spending on components of the GND rise in price on a pace with growth of nominal GDP. We also assume the resource use is linear, although it is likely that some projects will have greater upfront costs while other projects will be phased in later, after new infrastructure is in place.

13 Ezrati also includes very high estimates for greenhouse gas abatement, although it is not clear what his sources are and whether the numbers are global or for the US only. Given the lack of clarity, we are not including this in our further estimations.

 

          Recap using Forbes numbers: 100% renewable energy:     $200B per year 
                                      Smart Power Grid            $40B per year               
                                      Upgrade/retrofitting:      $320B per year 
                                      Total                      $560B per year 
                                      Percent of 2017 GDP        2.87%

A 2014 report from the Center for American Progress (CAP) and the Political Economy Research Institute (PERI) offers more modest reductions to greenhouse gas emissions: reducing them by about 40 percent over 20 years at a cost of about $200 billion in annual capital expenditures (Pollin et al. 2014). Of that $200 billion, $110 billion would be invested in low or zero emissions renewable energy generation, while the remaining $90 billion would go toward improving energy efficiency of residential and industrial buildings and transportation (their estimates for 20 years are as follows: $1.75 trillion investments into energy efficiency, including improving transportation efficiency, and $2.1 trillion investments into renewable energy). An additional $210 billion over 20 years can be invested in increasing public bus ridership (at 75 cents per ride). Our numbers below are based on shortening the timeline from 20 to 10 years and scaling it to 100 percent greenhouse gas reductions, instead of 40 percent (costs of greater reduction would not be perfectly linear, but this could be an approximate estimate). The increased public bus ridership numbers are not scaled, only shortened to 10 years. This brings our estimate of the total to $1,021 billion per year.

 

        Summary of PERI numbers: Low or zero emissions renewable energy generation   $550B 
                                 Improving building and transport energy efficiency  $450B 
                                 Increasing public transport utilization              $21B 
                                 Total per year                                    $1,021B 
                                 Percent of 2017 GDP                                 5.24%

 

While the CAP/PERI plan relies largely on biofuels to transition to renewables, the Jacobson plan by Mark Jacobson from Stanford is for 100 percent wind, water, sun (WWS) (Jacobson et al. 2017). According to Jacobson, his plan would cost between $10 trillion and $15 trillion, (Cassidy 2019) or 5.13 percent to 7.7 percent of (2017) GDP per year if implemented over 10 years (midpoint estimate $12.5 trillion over 10 years; $1.25 trillion per year, or 6.41 percent of 2017 GDP).

 

Geoffrey Heal of the Columbia Business School estimates that “the US economy could reduce carbon emissions by 80 percent from 2005 levels within three decades” through capital investments of between $3.3 trillion and $6 trillion (Heal 2017). Scaling this to 100 percent (again keeping in mind that this is a ballpark number) would take it to $4.1 trillion to $7.5 trillion. If implemented within 10 years instead of three decades, this could cost $410–$750 billion per year, or 2.1 percent to 3.84 percent of 2017 GDP (midpoint estimate $580 billion, or 2.97 percent of 2017 GDP).

 

We should keep in mind that any longer-term estimates of transition to renewable energy may be misleading because of the rapid decline of the cost of renewables. While the costs of producing coal and nuclear have gone up by 9 percent and 23 percent, respectively, the costs of solar photovoltaic and wind have decreased 88 percent and 69 percent, respectively, in the last decade (Mahajan 2018). According to a study by Energy Innovation, in 2018 renewable energy from local wind or solar was cheaper to produce than 74 percent of the coal fleet of the nation (Hill 2019). Without subsidies, already almost half of all coal projects would lose money (Carbon Tracker Initiative 2018). This number is projected to increase to almost 100 percent by 2025. If we can assume that falling costs (in the case of renewables, and rising costs in the case of nonrenewables) reflect rising efficiency of use of resources (so that it takes fewer resources to produce the same amount of energy), then resources required for the GND will fall over time.

 

The table below (Table 2) summarizes the costs of “greening” the economy, using averages whenever there is a range of estimates. An average of all the estimates is $888 billion annually, or 4.55 percent of GDP, and the average of the three costliest proposals is $1.1 trillion annually, or 5.6 percent of GDP, which is what we use in our estimates going forward.

 

To transition to a zero emissions system, however, we would stop all investment in the nonrenewable sector and gradually dismantle existing nonrenewable capacities. According to the Bureau of Economic Analysis, private investment in “mining exploration, shafts, and wells” was $140.9 billion in 2018, or about 0.7 percent of 2017 GDP (BEA 2019). We estimate that about 90 percent of that, or $127 billion (0.65 percent of GDP), is investment in petroleum and natural gas.14 To get the net cost of “greening,” we would then need to subtract the sum of our current spending on nonrenewables from our estimates below. Furthermore, since we are already investing in renewables, that cost may need to be subtracted as well. However, since it is not clear whether the proposals below are estimating net or total costs of greening, we will err on the side of caution and will not subtract current renewable investment.

 

Table 2.  Summary of Various "Greening" Proposals

  $ Billion % of 2017 GDP
Jacobson 1,250 6.41
AAF 1,030 5.3
CAP/PERI 1,021 4.98
Heal 580 2.97
Ezrati 560 2.87
Average 888 4.55

Top 3

Average

1,100 5.6

Fossil Fuel

Investment

-127 -0.65
Net Cost 973 4.95

 

 


REFERENCES

Anderson, G. F., P. S. Hussey, and V. Petrosyan. 2019. “It’s Still the Prices, 
     Stupid: Why the US Spends So Much on Health Care, and a Tribute to 
     Uwe Reinhardt.” Health Affairs 38(1): 87–95.

Anderson, G. F., U. E. Reinhardt, P. S. Hussey, and V. Petrosyan. 2003. 
     “It’s the Prices, Stupid: Why the United States Is So Different from Other Countries.” 
     Health Affairs 22(3): 89– 105. 

Baker, D. 2019. “MMT and Taxing the Rich.” Beat the Press. Washington, DC: Center for Economic 
     and Policy Research. February 15. 

BEA (Bureau of Economic Analysis). 2019. National Income and Product Accounts. Table 5.3.5. 
     Private Fixed Investment by Type. Last accessed April 30, 2019. 

Blahous, C. 2018. “The Costs of a National Single-Payer Healthcare System.” Arlington, VA: 
     Mercatus Center. July 30. 

Bruenig, M. 2019. “US Workers Are Paying High Taxes. But Without Any of the Benefits.” Jacobin. 
     April 14. 

Carbon Tracker Initiative. 2018. “42% of Global Coal Power Plants Run at a Loss, Finds World-
     First Study.” Press Release. London, UK: Carbon Tracker Initiative. November 30. 

Carter, Z., and A. C. Kaufman. 2019. “The War on Climate Change Won’t Be Won Quibbling over the 
     Green New Deal’s Costs.” Huffington Post. February 17. 

Cassidy, J. 2019. “The Good News about a Green New Deal.” The New Yorker. March 4. 

Claxton, G., and A. Damico. 2011. “Snapshots: Employer Health Insurance Costs and Worker 
     Compensation.” San Francisco, CA: Kaiser Family Foundation. February 27. 

CMS (Centers for Medicare and Medicaid Services). 2018. Table V.F1: Annual Revenues and 
     Expenditures for Medicare and Social Security Trust Funds and the Total Federal Budget, 
     Fiscal Year 2017. Published in “2018 Annual Report of the Boards of Trustees of the Federal 
     Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” Washington, DC: 
     CMS. 

———. 2017. “Quick Definitions of National Health Expenditure Accounts (NHEA) Categories.” 
     Available at: https://www.cms.gov/research-statistics-data-andsystems/statistics-trends-and-
     reports/nationalhealthexpenddata/downloads/quickref.pdf. Last accessed May 5, 2019.

Dantas, F., and L. R. Wray. 2017. “Full Employment: Are We There Yet?” Public Policy Brief No. 
     142. Annandale-on-Hudson, NY: Levy Economics Institute of Bard College. February. 

Ezrati, M. 2019. “The Green New Deal and the Cost of Virtue.” Forbes. February 19. 

Foster, J. F. 1981. “The Reality of the Present and the Challenge of the Future.” Journal of 
     Economic Issues 15(4): 963–68. 

Fullwiler, S., S. A. Kelton, C. Ruetschlin, and M. Steinbaum. 2018. “The Macroeconomic Effects of 
     Student Debt Cancellation.” Research Project Report. Annandale-on-Hudson, NY: Levy Economics 
     Institute of Bard College. February. 

Heal, G. 2017. “Reflections—What Would It Take to Reduce US Greenhouse Gas Emissions 80 Percent 
     by 2050?” Review of Environmental Economics and Policy 11(2): 319–35. 

Hill, J. S. 2019. “US Wind and Solar Cost Less Than 74% of Existing Coal Fleet.” CleanTechnica. 
     March 28. 

Holtz-Eakin, D., D. Bosch, B. Gitis, D. Goldbeck, P. Rossetti. 2019. “The Green New Deal: Scope, 
     Scale, and Implications.” Washington, DC: American Action Forum. February 25. 

Jacobson, M. Z., M. A. Delucchi, Z. A. F. Bauer, S. C. Goodman, W. E. Chapman, M. A. Cameron, C. 
     Bozonnat, L. Chobadi, H. A. Clonts, P. Enevoldsen, J. R. Erwin, S. N. Fobi, O. K. Goldstrom, 
     E. M. Hennessy, J. Liu, J. Lo, C. B. Meyer, S. B. Morris, K. R. Moy, P. L. O’Neill, I. 
     Petkov, S. Redfern, R. Schucker, M. A. Sontag., J. Wang, E. Weiner, and A. S. Yachanin. 
     2017. “100% Clean and Renewable Wind, Water, and Sunlight All-Sector Energy Roadmaps for 139 
     Countries of the World.” Joule 1(1): 108–21. 

Keynes, J. M. 1940. How to Pay for the War: A Radical Plan for the Chancellor of the Exchequer. 
     London: Macmillan. 

KFF (Kaiser Family Foundation). 2017. Figure A: Average Annual Firm and Worker Premium 
     Contributions and Total Premiums for Covered Workers for Single and Family Coverage, by Plan 
     Type, 2017. Published in “Employer Health Benefits: 2017 Summary of Findings.” San 
     Francisco, CA: Kaiser Family Foundation. September 19. 

Krugman, P. 2019. “How Much Does Heterodoxy Help Progressives?” New York Times. February 12. 

Mahajan, M. 2018. “Plunging Prices Mean Building New Renewable Energy Is Cheaper Than Running 
     Existing Coal.” Forbes. December 3.

Mueller, M., L. Hagenaars, and D. Morgan. 2017. “Administrative Spending in OECD Health Care 
     Systems: Where Is the Fat and Can It Be Trimmed?” in Tackling Wasteful Spending on Health. 
     Paris: OECD Publishing. 

OECD (Organisation for Economic Co-operation and Development). 2019. Health Spending (Indicator). 
     OECD Data. doi: 10.1787/8643de7e-en. Last accessed May 5, 2019. 

Papanicolas, I., L. R. Woskie, and A. K. Jha. 2018. “Health Care Spending in the United States 
     and Other High-Income Countries.” JAMA 319(10): 1024–39. 

Pilkington, P. 2019. “How Far Can We Push This Thing? Some Optimistic Reflections on the 
     Potential for Economic Experimentation.” 
     https://fixingtheeconomists.files.wordpress.com/2019/04/how-far-can-we-push-thisthing.pdf 
     Pollin, R., J. Heintz, P. Arno, J. Wicks-Lim, M. Ash. 2018. “Economic Analysis of Medicare 
     for All.” Amherst, MA: Political Economy Research Institute. November 30. 

Pollin, R., H. Garrett-Peltier, J. Heintz, and B. Hendricks. 2014. “Green Growth: A U.S. Program 
     for Controlling Climate Change and Expanding Job Opportunities.” Center for American 
     Progress and Political Economy Research Institute. September 18. 

Rubio, M. 2019. “American Investment in the 21st Century.” Washington, DC: Office of Senator 
     Marco Rubio, United States Senate. May. Available at: 
     https://www.rubio.senate.gov/public/_cache/files/9f25139a-6039-465a-9cf1- 
     feb5567aebb7/4526E9620A9A7DB74267ABEA5881022F.5.15.2019.-final-projectreport-american-
     investment.pdf 

Ruml, B. 1946. “Taxes for Revenue Are Obsolete.” American Affairs 8(1): 35–9. 

Sanders, B., and M. Lee. 2019. “Congress Just Told Trump to Get US Troops out of Yemen. Next,  
     Afghanistan?” USA Today. April 4. 

Shane, L. 2019. “A Plan to End Afghanistan War: Declare Victory and Give $2,500 Bonuses to Vets.” 
     Military Times. March 5. Spross, J. 2016. “How World War II Reveals the Actual Limits of 
     Deficit Spending.” The Week. May 16. 

SSA (Social Security Administration). 2018. “The 2018 Annual Report of the Board of Trustees of 
     the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.”  
     Washington, DC: SSA. 

Stiglitz, J. E., and L. J. Bilmes. 2010. “The True Cost of the Iraq War: $3 Trillion and Beyond.” 
     Washington Post. September 5. 55 

Summers, L. 2014. “Why Public Investment Really Is a Free Lunch.” Financial Times. October 6.

Tcherneva, P. 2018. “The Job Guarantee: Design, Jobs, and Implementation.” Working Paper No. 902. 
     Annandale-on-Hudson, NY: Levy Economics Institute of Bard College. April. 

———. 2017. “Inequality Update: Who Gains When Income Grows?” Policy Note 2017/1. Annandale-on-
     Hudson, NY: Levy Economics Institute of Bard College. April. 

Woolhandler, S., and D. U. Himmelstein. 2017. “Single-Payer Reform: The Only Way to Fulfill the 
     President’s Pledge of More Coverage, Better Benefits, and Lower Costs.” Annals of Internal 
     Medicine 166(8): 587–88. 

Woolhandler, S., T. Campbell, and D. U. Himmelstein. 2003. “Costs of Health Care Administration 
     in the United States and Canada.” New England Journal of Medicine 349: 768–75. 

Wray, L. R., F. Dantas, S. Fullwiler, P. R. Tcherneva, S. A. Kelton. 2018. 
     “Public Service        Employment: A Path to Full Employment.” Research Project Report.   
     Annandale-onHudson, NY: Levy Economics Institute of Bard College. April. 

Wray, L. R. 2019. “MMT Responds to Brad DeLong’s Challenge.” New Economic Perspectives. March 12.

 


 

By  Yeva Nersisyan, Franklin & Marshall College and 

L. Randall Wray, Levy Economics Institute of Bard College


 

The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.

Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad.

 

Levy Economics Institute

P.O. Box 5000 Annandale-on-Hudson, NY 12504-5000

http://www.levyinstitute.org

Copyright © Levy Economics Institute 2019 All rights reserved

ISSN 1547-366X

Rate article 
Media Literacy
Trending Articles
Culture In Decline
Documentaries about the Israel-Palestine Conflict
Permaculture
Subscribe for $5/mo to Watch over 50 Patron-Exclusive Films

Become a Patron. Support Films For Action.

For $5 a month, you'll gain access to over 50 patron-exclusive documentaries while keeping us ad-free and financially independent. We need 350 more Patrons to grow our team in 2024.

Subscribe here

Your support helps grow our 6000+ video library, which is 99% free thanks to our patrons!