Simon Wren-Lewis has written about funding the Green New Deal today. His answer is borrowing (which is no surprise given the structure of Labour's fiscal rule, which he co-authored). As I showed yesterday, I can live with this.
I did like his justification for increasing the national debt to achieve this goal:
No one in a 100 years time who suffers the catastrophic and (for them) irreversible impact of climate change is going to console themselves that at least they did not increase the national debt. Humanity will not come to an end if we double debt to GDP ratios, but it could come to an end if we fail to combat climate change.
That's hard to argue with.
Given the choice what would a neoliberal do? Save the planet, or balance the government's budget?
Troublingly, I am not sure I can predict the answer.
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Did you invent the green new deal??
I was a co-founder of the Green New Deal Group which created the Green New Deal on which all current versions are based
I am a main author of many of its reports
So I guess the answer is ‘yes’
Forgive me but what do you know of the science behind it?
What, the Green New Deal?
Have you noticed the supper on climate change?
@ Miles
What a bizarre question to ask.
There’s plenty of scientists behind the notion of moving to green/renewable energies (and associated technologies), but I suspect few who understand the best political and economic path to that destination.
Ideas as grand as the GND require talents from many corners.
Johan G says:
@ Miles
“What a bizarre question to ask.”
Not bizarre, Johan, just lifted straight from the slimy troll, faux naive book of smart-arsery. (101)
In so far as it could be described as question other than of a rhetorical type it so far misses any point as to have already received more response than it merits.
@ Andy Crow
Yep, good point. Must remember to avoid feeding the trolls…
What is so ludicrous about the question is that austerity will never balance the budget and the neoliberal playbook knows that. Balancing the budget is sheer pretence at policy intended to bamboozle a gullible public into believing government is behaving prudently.
George Osborne was going to do it in five years. Yeah right. Now Labour is going to it in five years…yeah right. How stupid are we supposed to be?
Couldn’t agree more Andy.
It is surely obvious that you cannot finance anything by borrowing (creating debt) and simultaneously balance the books. If in aggregate the money supply grows then someone has to take on more debt. If the intention is that all countries’ GDPs grow together then increasing national debts somewhere are inevitable.
Of course there are two obvious solutions. Either use a government’s power to create money ex nihilo without debt or simply stop worrying about the national debt. No amount of cerebration or prestidigitation can change that.
Like you I think, I long to see a Labour (or any) politician point out in public that austerity does not save a penny and you can never balance the books by cutting spending. Or even that having balancing the books as an aim is stupid.
But they don’t, apparently, get that
The debt cap on Local Authority Housing Revenue Accounts (HRA) that has recently lifted is a case in point.
My sector is cock a hoop about it because it means that we will be able to build more much needed affordable homes.
However, it is still localised debt that is fuelling this extra development – not real (new) nationally produced cash from the Government, so just like hard pressed families, LAs are increasing their debt levels to make something happen. Debt is propping up the economy. Given that HRAs everywhere are being used to support austerity-depleted general funds and that social landlord reserves are now also being depleted – this is not really good news in the long run.
In our meetings with Homes England (essentially the ex-Housing Corporation) who manages Government funding – such that it is) there is a palpable feeling that the HE wants to do more but has its hands tied by austerity. The grant levels per property are very, very poor and Councils everywhere also need to use their Right To Buy Receipts to build new homes as a subsidy or risk sending them back to the Government.
Yet we are not allowed to combine RTB receipts and HE Affordable Housing Grant (Government money) on the same new property which would help immensely and also reduce the indebtedness of schemes.
Also, with the debt cap lifted there is still the thorny problem of land supply. Austerity got rid of the brownfield remediation grants so many brownfield sites will sit there whilst potential developers and landowners sit around arguing over how and who is to clean it up! Green field site prices are going up to almost silly prices – its a seller’s market.
In a word, the situation can only be described as ridiculous.
Agreed
Email Address Supplied says:
“The debt cap on Local Authority Housing Revenue Accounts (HRA) that has recently lifted is a case in point.
My sector is cock a hoop about it because it means that we will be able to build more much needed affordable homes.”
But your cock a hoop will be as the gentle cooing of a dove compared to the joy unbounded in the finance sector as another bankers’ charter comes into being.
Break out the Bolly, chaps !
Given that the neoliberal era has seen government debt explode to ridiculous levels I think it’s safe to say that they have no interest in balancing the government’s budget. It’s about transferring wealth to the all ready rich and leaving the majority of the population financially insecure and vulnerable to rentierism and exploitation.
I think it’s also safe to say that that some sections of the super rich see climate change as an opportunity to get even richer and amass more power. They are not worried about it at all.
Unfortunately the neoliberals are already in charge of dealing with climate change: http://ejcj.orfaleacenter.ucsb.edu/wp-content/uploads/2017/06/2017.-Ciplet-and-Timmons-Climate-change-and-the-transition-to-neoliberal-environmental-governance.pdf
The authors cite numerous ways in which the neoliberal orthodoxy has captured the governance of climate change policies at the UN level. For example: “marketization, in which market mechanisms, private sector engagement and purportedly ‘objective’ considerations are viewed as the most effective and efficient forms of governance”. Another example of the neoliberal approach has been to broaden “responsibility” for tackling climate change to include all states no matter how much or how little they contributed to the problem and no matter how few resources they have to do anything about it.
I am not hopeful. The best a neoliberal could do is get out the way so that an international model could be developed based on, inter alia, the science, fairness, equity, distributive justice and funding for impoverished countries.
Graham Hewitt says:
“I am not hopeful. The best a neoliberal could do is get out the way ….”
…an I’m not hopeful neoliberals are going to willingly get out of the way. Only violence will shift them and they have the tools, so the collateral damage will be immense. ‘Twas ever thus.
Easy Andy lad!
Although I increasingly agree that violence might be useful when dealing with the social degenerates that are the Neo-liberals, the only way we can euthanize them morally is through the use of the ‘2i’ approach:- Investment and Intervention:
1. MMT (with of course all the wrinkles taken out).
2. Green New Deal.
3. Properly regulated markets.
4. Trade treaties that equalise costs and benefits.
What should a neo-liberal do (about anything)?
1. Admit that you are wrong about just about everything and that your ideas have not worked. Ever.
2. Stop winding people up and setting them against each other (stop being fascists).
3. Find somewhere quiet and out of the way and do something else with your lives – we don’t need you.
That’s the nicest way I can think of saying what needs to be said to be honest.
One day I think – sometime in the future – neo-liberalism will be classed as a form of anti social behaviour (ASB).
🙂
There is a slight problem. The Green New Deal is the thing to do whether the Earth is in climate change or not. Climate science is a fairly new and complicated.
There is no new “E equals m c squared” for Climate Science.
So calling for the Green New Deal should not be predicated on Global Warming.
It’s the right thing to do whatever the climate does.
Oh, and the world is not flat
But you’re suggesting sat navs be designed as if it might be, just in case, because some still think it might be?
Let’s not be silly, please?
Alan Lafferty says:
“So calling for the Green New Deal should not be predicated on Global Warming.
It’s the right thing to do whatever the climate does.”
You have a point, Alan. Green New Deal is a sensible approach to economic growth (or stability) which takes oil and other fossil fuels out of centre stage. This isn’t just a matter of Climate Change it is also concerned with the wider aspects of biosphere degradation….pollution of the land and seas particularly with plastics which break-up but don’t break-down……pollution of our most essential resources clean water fit to drink and clean air fit to breathe.
Maybe climate change is not the hook we need to hang it on, though the threat of climate catastrophe is not likely to go away, and will create immense geo-political tensions as populations gradually, or more suddenly have to relocate away from desert or saline swamp.
Maybe we need to approach tackling climate change by dealing with issues that we can get the popular imagination to grasp. At the local level the trend is the going the wrong way as local authorities are starved of the cash to implement recycling programmes and centres become bigger and further away from the population which would use them. Farm gateways and lay-byes make imperfect recycling centres. having the populus fl-tipping from electric vehicles is not really going to save the planet is it ?
[…] is a question commonly asked in the last few days. I have already noted Simon Wren-Lewis doing so. He is not alone in concluding that debt is the answer, and that when the balance of priorities is […]