A Primer On the "Green New Deal"

I'm picking on the "Green New Deal" first, not because I think it's the most important thing to cover, but because it's the start of the semester and I can link to a lot of stuff on it that's already done ;-)

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The "Green New Deal" is a proposed package of policy proposals that has some popularity amongst voters, mostly for Democrats.

The name is a sort'of portmanteau of "green policies" and the "New Deal" policies of President Roosevelt that many Democrats aspire to (since it put them in control of both houses of Congress for most the next 2 generations). The New Deal is widely credited by non-economists with lifting the U.S. out of the Great Depression. Actual economists are way, way, more guarded about that conclusion.

Th "Green New Deal" is has been covered in this class in earlier years, so this post mostly links to older ones.

I will freely admit that it proposes nice/admirable things.

And, for those of you who had me for principles know, I push the idea that we should judge government programs on what they do, rather than what they cost. If they are worth it, it should not matter what they cost. If they are not worth it, we shouldn't pay for them.

Except in this case ...

My thinking about all this is that the costs should at least be feasible for that position of "if it's worth it, find a way to pay for it" to make sense.

For example, if I say I should spend $10K to buy a used car, and I have $10K to do so, then it's feasible. But if I say I should buy a used car, and I have $10K around, and I say only a Lamborghini Aventador will do, then reasonable people should be able to agree that I'm a kook and should probably be ignored.

Getting back to the Green New Deal, low ball, Democratic-friendly estimates of its cost are in the range of: 

• 450 times higher than the entire real cost of the 14 year Apollo Project to land on the Moon.
• 2,400 times higher than the entire real cost of the Manhattan Project to build the first atomic bomb.

OK. Those are scare numbers. But they are accurate.

A more realistic measure would be to compare broad collections of social programs put in place under other administrations, since the Green New Deal is not all about buying shiny new stuff (like Apollo and Manhattan were). Here goes:

• 80 times higher than the entire real cost of the whole New Deal program through 1945.
• 60 times higher than the entire real cost of the Obama stimulus package of 2009 (some of which is still not online, or paid for).

The word that is used in policy analysis circles for policy proposals that require magical thinking is "unicorn". Debates over how to tweak the policy proposal are usually referred to as something flippant, like deciding on its color. The point is, it doesn't matter how nice a unicorn you can imagine, you're never going to get one. And I do note that many people feel that it's OK to be unrealistic when you're being aspirational, but I happen to think there's a limit on how far you can go.

I run a continuing series of posts entitled "Why Is Macro So Hard?" (some on this blog, and some over on this one I don't use for class). If you had me for principles, you may recall that I cover an abridged form of that in the last month of class. A recent edition to this set is idea of an Overton Window. The Green New Deal currently appears to be entering an Overton Window, and it seems like stuff like ... counting ... isn't in there with it.