The Green New Deal's Unrealistic Dreams
Just over a month after taking office, Democrat Congresswoman (and BU alumna) Alexandria Ocasio-Cortez (NY-14) introduced her first sponsored bill on 7 February 2019. With 89 cosponsors and strong public support, House Resolution No. 109, more popularly known as the “Green New Deal,” borrows President Franklin D. Roosevelt’s idea of a massive economic stimulus except with a heavy emphasis on the environment. Stemming from her Bronx constituent’s and her own progressive and working-class roots, AOC’s Green New Deal has very ambitious goals. The foremost of these include reducing greenhouse gas emissions to net-zero and unemployment to virtually zero percent in a span of ten years. While both desirable in a perfect world, these goals as well as the means to achieving them are in no way economically viable in America, also leaving the U.S. in a diminished position in the international realm.
To meet this environmental goal, first, all existing buildings across America would be renovated to be more water and energy efficient. This entails installing solar panels and sustainable rooftop gardens on each building. Next, all public and private transportation would be electric-powered or fueled by some other non-polluting agent, requiring a complete overhaul of public transportation systems throughout the country. The agricultural sector would also get a makeover, with increased subsidies to family and sustainable farmers in tandem with government training on sustainable practices. Lastly and most importantly, the energy sector in ten years must become 100% "clean, renewable, and zero-emission" while also meeting 100% of the power demand.
To achieve her social goals of zero percent unemployment and "economic security for all," the GND proposes numerous pathways to this economic utopia. The means include providing higher education for all citizens, increasing wages, strengthening unions, mandating paid family and medical leave, enacting paid vacations, providing retirement security, and furthering equal opportunity legislation.
These public projects would be no cheap undertaking. The centrist nonprofit American Action Forum estimates that both aspects of the GND could cost anywhere from $51 to $93 trillion over the ten year implementation period. For reference, the U.S. GDP in 2018 totaled around $20.5 trillion, ranking first in the world. Government spending accounts for only 20% of this amount, but the government’s share of total GDP expenditures is inflated, as the U.S. has in recent years spent a great margin more than it has collected as tax revenue. Because of this, the plan would require a major hike in taxes. As the plan currently stands, each American household would be responsible for $600,000 worth of the Green New Deal, according to the same AAF study. This translates into $60,000 annually for each household.
The taxes required for this massive public project and economic overhaul would harshly affect all Americans, as taxing just the rich will not do the trick in this instance. For context, if the ten richest Americans, including Bezos, Gates, and Buffet, were taxed at a rate of 100%, meaning all their wealth was confiscated, the revenue would only amount to half of a trillion dollars. If the 400 richest Americans were taxed at this rate, revenue would total around $2.9 trillion, which could only pay for about 30% of one year of the GND. According to the AAF study, virtually 75% of all of America’s existing wealth would have to be confiscated to pay for AOC’s Deal, and this is in addition to federal income taxes, state taxes, and local property taxes. Despite this, AOC and her GND supporters argue that no cost is too high to save the planet, as they believe that climate change is the single greatest threat to humanity that will only increase with time. However, implementation of the Deal would essentially leave the vast majority of Americans penniless until completed implementation ten years down the road. This plan is simply not economically feasible if Americans wish to continue to put food on their tables and would most likely leave the Congresswoman with a taxpayer revolt on her hands.
The GND also has problems that put the U.S. at a competitive disadvantage in the international arena.
First, the Deal’s goal to reduce all greenhouse gases means that all fossil fuel consumption must be halted. It then follows that American demand for fossil fuel will dramatically decrease, as 80% of energy consumed in the U.S. is from these sources. Because the U.S. consumes 1.6 billion metric tons of fossil fuels each year, this plummeting demand will drag down the international price of the fuels. While fossil fuels are considered the scourge of the environment in the GND, other nations will gladly take advantage of these extremely low prices. These increased foreign imports and consumption will give overseas states a competitive advantage in industry and manufacturing, putting their final produced goods at a lower, more attractive price in the international marketplace. AOC believes her GND principles will diffuse throughout the globe because of the American example, but countries not as wealthy as the U.S., which are the majority of them, cannot afford to forfeit opportunities such as this.
Second, AOC proposes that the Appropriations Committee cut military spending in order to finance her GND. Doing this would decrease the U.S.'s perceived strength on the global stage. This would also put the country at a comparative disadvantage in the fight not only against physical terrorist attacks, but also against cyberterrorism attacks, which are increasingly more common, given Wikileaks and similar organizations. Defense is expensive but necessary in a world where a foe doesn’t have a home country or known face. The current military budget is $700 billion, but reallocating only some of it is useless, as it would barely put a dent in the Deal’s total price. Reallocating all of it would still barely account for the Deal’s total cost and would obliterate the U.S.’s reputation as a strong international leader with tremendous capabilities.
Many Americans are enamored by the GND’s concepts and goals and reasonably so. A country with no toxic pollution, unemployment, or economic instability sounds like a paradise. The only problem is that there is no possible way it can be financed without destroying the livelihoods of virtually every citizen and putting our national security at great risk. The GND is just another example of a policy that “looks good on paper,” but is simply impossible to finance and implement. Congresswoman Ocasio-Cortez may soon realize that the goals of her Deal are merely pipe dreams.