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This week the American Enterprise Institute issued a devastating critique by Benjamin Zyndar of the Green New Deal (GND) proposal introduced by Senator Markey in the Senate and Representative Ocasio-Cortez in the House of Representatives. It was subsequently rejected by the Senate in a 57 to 0 vote. A one-page summary of this critique can be found here, with the full AEI report here.
- Chief among the GND’s goals,
- , is “meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources . . . by dramatically expanding and upgrading renewable power sources.” A highly conservative estimate of the aggregate cost of this goal alone would be $490.5 billion per year, permanently, or $3,845 per year per household. The GND renewable electricity mandate would also create significant environmental damage — there is nothing clean about ‘clean’ electricity — and require over 115 million acres of land, an area approximately 15 percent larger than the land area of California.”
The GND proposes to finance their enormously expensive plan primarily by “The use of inflation as a mechanism for the acquisition of real resources for the government imposes its own set of large costs; the literature suggests that annual inflation rates of 10 percent or 20 percent would impose economic losses of about $2 trillion and $4 trillion per year, respectively. This effect is crudely analogous to the excess burden of the explicit tax system. Modern Monetary Theory is little more than the latest example of the old argument that there is available a free lunch, as illustrated by the argument from a prominent proponent that ‘anything that is technically feasible is financially affordable….’”
“The GND proposals for the transportation sector would create large wealth transfers from rural, exurban, and suburban regions to urban ones, and they would reduce individual mobility sharply by increasing the ability of government to control transportation patterns….”
One of the most devastating findings is that “The GND at its core is the substitution of central planning in place of market forces for resource allocation in the US energy and transportation sectors narrowly and in the broad industrial, commercial, and residential sectors writ large. Given the tragic and predictable record of central planning outcomes worldwide over the past century, the GND should be rejected.”
The AEI review implies that the authors of the GND have not made a contribution to improving the environment, but rather made a devastating prescription for destroying the US economy, which is the basis for funding future environmental improvements. A number of announced Presidential and Congressional candidates for Democratic Party nominations have announced various degrees of support for the GND. Voters may wish to take this into account in deciding which candidates to vote for next year.
[Originally Published at Carlin Economics and Science]