Recently, ex-Congressman Beto O’Rourke distinguished himself in this regard. He proposed his “Green New Deal” project worth $ 5 trillion. O’Rourke promises to build a lot of “green” infrastructure with this money and achieve a rejection of carbon dioxide emissions by 2050.
His project, of course, pales in comparison with the “Green New Deal” of Democrats in Congress. They promise to achieve the same results in 10 years and spend $ 94 trillion on all this.
On the fair question of where to get such sums, the liberal public usually answers with verbose judgments about high taxes and how good it would be to “take away and divide” the property of billionaires. However, even if all this is done, the funds received will not be enough to pay one twentieth of the Green New Deal.
Nowadays, a relatively new concept is gaining popularity among progressive public, which has long been considered marginal. She calls herself “modern monetary theory.” Alexandria Osazio Cortez, in particular, is trying to popularize this theory among his club of fans.
The essence of this concept is simple. It grows from the environment of neo-Keynesianism, but it focuses precisely on monetary policy. To stimulate economic growth, the state should spend a lot of money on public programs. In order to avoid excessive inflation, it is proposed to raise taxes to the limit, “thus withdrawing” the excess money supply from circulation.
Public debt is a fictitious concept, because the government has a monopoly on issuing new money. Accordingly, it must constantly take new tranches from the central bank and inject them into the economy, artificially maintaining a high level of consumption. If inflation begins to grow above a comfortable level, the state needs to increase taxes and temporarily free the economy from “extra money”.
There are plenty of weak points in this theory. A high level of government spending will turn the economy into state capitalism, where companies close to the government will win. All the rest will begin to go broke under the burden of high taxes. They will probably hit the level of labor productivity, which in turn will again trigger the inflation flywheel.
But perhaps the most important thing: this theory believes in an omnipotent state, trust in which cannot be shaken. Evidento Cortez and her fellow minds believe that the Fed can be forced to print 94 trillion dollars, run them into the economy, and everyone will continue to believe in the purchasing power of the dollar. For supporters of socialism, such faith is quite natural, but it itself, like socialism in general, has only the most indirect relation to reality.