The economy needs a Green New Deal Eddy Yeretnov
their lost money; this means that there will be limited consumer spending even COVID-19 initiated an economic cri- if we defeat COVID-19 — the problem sis some economists say is comparable to with less consumer spending is fewer customers for businesses, which in turn that of the Great Depression. To recover, we need a modern New Deal, something leads to smaller profits, which require layoffs. Once workers are fired, they many call the Green New Deal. will not be able to afford spending in Our Current Situation: the economy, which leads to a rinse and The job market that graduating students will be entering isn’t in good shape. repeat of this vicious cycle. Learning from our history: According to the Bureau of Labor So, what is the solution to this conStatistics, in April of 2020, the U.S. hit an all-time high in unemployment at 14.7%. tinuing downturn? We find a solution by learning about Contrary to what President Donour history and the legacy of former ald Trump may claim, we are not in a President Franklin Roosevelt. FDR V-shaped recovery (which means that inherited the worst economic crisis in the economy is recovering at the same American history from former Presirate it declined). While the unemploydent Herbert Hoover. By implementing ment rate has steadily shrunk since the a radical New Deal, FDR and Congress all-time low, it recoiled more so due to increased consumer confidence and cash corporate bailouts and lower interest flow by increasing spending, defeating rates rather than a real V-shaped recovthe Great Depression. ery. Now that the Federal Reserve (Fed) The New Deal held two parts; it incan no longer lower interest rates since creased worker protections and spending they are already at 0, the Fed has little in the economy through public works remaining tools to create any improveprojects. ment. The increased protections like social With high unemployment comes a security assured consumers that they decrease in consumer spending and a were in recovery and prompted those reduction in profit; the use of corporate saving in fear to spend more and stimusocialism, government support of large late the economy. This consumer conficorporations, in bailing out the rich will dence is something we can recreate now come back to bite both the wealthy and by defeating the COVID-19 pandemic working class. and ensuring healthcare as a fundamenEconomic Depression: tal human right. Some believe that after a COVID-19 Public works are where we enter the vaccine arrives, we can “go back to realm of the Green New Deal. Just as normal” and forget the pandemic ever they were in the past, public works will existed. be vital in restoring our economy. The There are two problems with such a government is the only entity that can theory. print money. While printing money First, the distribution of a vaccine seems to be counterintuitive by creatwill be a long and complicated task ing inflation, it is, in fact, the opposite. that could take well into 2021 to reach Modern Monetary Theory dictates that the number of people needed for herd inflation does not hurt the economy as immunity. long as gross domestic product growth “I can foresee that even with a really good vaccine, mask-wearing will contin- outpaces inflation. This money can be spent on modernizing our grid and creue well into the third or fourth quarter of 2021,” Dr. Anthony Fauci, the director ating a sustainable future for generations to come. of the National Institute of Allergy and Moving forward: Infectious Diseases, said. Many Carlmont students will be Second, the concept of cash flow rings entering the workforce under the next true here. Those who were unemployed presidential term. High unemployment won’t be automatically reimbursed for
lowers job opportunities, especially for workers without experience due to job scarcity. The Jobs Guarantee program embedded in the Green New Deal will drop the unemployment rate to historic lows and create a base of consumers spending all of the money printed by the government. These new consumers will get our economy moving again. Goldman Sachs’ analysts predict that the Fed will begin increasing its interest rates two years earlier under a Democrat-controlled government (which would likely be more prone to increase spending) than a Republican one. Rising interest rates occur to control inflation and are a sign of a recovering economy, a signal that increases consumer confidence. It’s about time we think about the Green New Deal as an economic advantage rather than something that would be a burden.
OVERVIEW The Green New Deal is a non-binding resolution which would affirm the United States of America’s commitment to combat climate change and create a more sustainable future.
GOALS - A transition to 100% clean energy - Guarenteeing health care to all Americans - Investment in public transportation - Providing quality education to all Americans - Updating infrastructure - A jobs guarantee program
THE COST OF INACTION
7.4
million less jobs in a Trump vs. Biden administration due to higher spending and stimulus
HOW WE PAY FOR IT Using the Modern Monetary Theory, no tax increases are needed to pay for the Green New Deal as it is paid for through strategic defecit. Eddy Yeretnov
JANUARY 2021 HIGHLANDER 19
