There’s a certain puzzlement in this from Alexandria Ocasio Cortez. For she tells us that taxes on high earners and the rich should be raised in order to fund the Green New Deal. But this is the same Alexandria Ocasio Cortez who has told us that the Green New Deal is going to make the most lovely profit, isn’t it? And if there’s a profit then why do we need higher taxes to fund it?
Could of course be that Ms. Ocasio Cortez doesn’t know what she’s talking about but that would be a dangerous assumption about one who got elected so young. An alternative would be that she’s simply spouting propaganda and agitprop as it sounds good to whatever audience – well, yes, that would explain how she got elected so young, wouldn’t it?[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Rep. Alexandria Ocasio-Cortez (D-N.Y.) is floating an income tax rate as high as 60 to 70 percent on the highest-earning Americans to combat carbon emissions. Speaking with Anderson Cooper in a “60 Minutes” interview scheduled to air Sunday, Ocasio-Cortez said a dramatic increase in taxes could support her “Green New Deal” goal of eliminating the use of fossil fuels within 12 years — a goal she acknowledges is ambitious. [/perfectpullquote]
The puzzle is why would we need higher taxes for that Green New Deal? Firstly, there’s all that talk about Modern Monetary Theory:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] If the question is what the US can afford to invest, the way to think about it is not in terms of how much money the country has. It literally has as much money as it wants. It prints its own money! (The US has a “fiat currency,” in the lingo.) The US government can spend all the money it wants. What ultimately sets the limits on America’s ability to invest are its resources. It has so much labor potential, so much natural resources, so much manufacturing capacity, etc. By paying for stuff, injecting money into the economy, the government puts those resources to work. [/perfectpullquote]
Just print the money and do it, why not? But then there’s the plan itself:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The Plan for a Green New Deal (and the draft legislation) shall recognize that innovative public and other financing structures are a crucial component in achieving and furthering the goals and guidelines relating to social, economic, racial, regional and gender-based justice and equality and cooperative and public ownership set forth in paragraphs (2)(A)(i) and (6)(B). The Plan (and the draft legislation) shall, accordingly, ensure that the majority of financing of the Plan shall be accomplished by the federal government, using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks, public venture funds and such other vehicles or structures that the select committee deems appropriate, in order to ensure that interest and other investment returns generated from public investments made in connection with the Plan will be returned to the treasury, reduce taxpayer burden and allow for more investment.[/perfectpullquote]
It’s going to make a profit so why do we need to worry about how to finance it? And if it is going to make a profit then we don’t need higher taxes, do we?
Or, of course, it could be that Alexandria Ocasio Cortez is just saying whatever in public in pursuit of votes. No wonder she got elected so young.