Two socialists lead the Democratic pack at the moment as presidential aspirants: Kamala Harris and Bernie Sanders. But socialists make the world’s worst economists. The Green New Deal Resolution is their brainchild. It’s also a Democrat baby. This resolution now has 68 co-sponsors in the House, and every last one of them is a Democrat.
Let us ponder a few of the effects of the Green New Deal. In this way, we see how the Democratic Party parades its economic illiteracy before us and how it intends to institute socialism in America.
Suppose that Uncle Sam outlaws fossil fuels. They make up about 63 percent of the sources of electricity; nuclear supplies 20 percent. That’s because renewable sources are much more costly, and their 17 percent share already includes subsidies. Building the renewable sources to replace the existing plants has to be financed. No one will buy the bonds to pay for construction unless they foresee getting their money back with interest. They will need assurances or guarantees that the new plants will pay off, which means that utility commissions will have to assure higher rates charged to their customers, you. The rates will be higher because renewable sources produce electricity at higher costs.
Businesses then find their costs have increased. Consumers find that the prices they pay are going up. Businesses decide they may as well move to another country that doesn’t impose the laws against fossil fuels. In response, the U.S. government restricts their capital movement. They close their doors. This too raises prices.
Foreign manufacturers seize the opportunity to ship their goods into America, especially as domestic prices have risen. The U.S. government imposes tariffs to prevent this, thereby further making us poorer. But how are Americans supposed to be able to buy these foreign goods anyway? We have to ship them something in return ultimately, but our goods are priced out of the market compared to their goods. We lose the benefits of trading with others and we lose division of labor benefits as the market shrinks.
The socialists think the Green New Deal entails investments that pay off more than their cost. But if the good that’s produced is American air with lower CO2 content, how do we use that to pay back the bonds that finance new plants? How do we use that air to purchase foreign goods? How do we use that air to recoup the higher prices for everything we consume? Our cleaner air goes into the atmosphere where it mixes with every other country’s dirtier air. Meanwhile, they follow their own rules.
Once Uncle Sam regulates energy production in depth, the market disappears. Innovation and discovery fall into disrepair. The “industry” becomes a political football, ripe for exploitation of subsidies to finance wild-eyed schemes.
The U.S. government cannot unilaterally throw away its existing energy-production plants, replace them with higher-cost methods and control the world’s air quality. The Green New Deal is a gift to the world and to foreign producers. The U.S. will be tempted to allow foreign manufacturers in to the American market if their countries put in the same restrictions on fossil fuels, but they won’t go along with it. When companies in the U.S. that own fossil fuels attempt to export them, the U.S. will clamp down on them. Industries that use energy intensively will lobby for breaks and subsidies. It won’t be long before the U.S. government is intensively involved in controlling the entire U.S. economy. And this is exactly what the socialists want. The Greenness of the Green New Deal is a disguise for instituting far-reaching socialism in America.1:29 pm on February 24, 2019 Email Michael S. Rozeff