All the rage of the oligarchs’ news media seems to be “How do we pay for the green new deal?” I have imagined the following conversation between a skeptic of the Green New Deal and a proponent of the Green New Deal.
Skeptic: How do we pay for the green new deal?
Proponent: How did we pay for World War II?
S: We sold war bonds to pay for WW II.
P: If you think that is how we financed the war, then where did people get the money to buy the war bonds?
S: A lot of the people worked in the defense industry and were paid good wages.
P: Where did the defense industry get the money to pay these good wages?
S: The defense industry had government contracts to build, planes, ships and other necessities of war.
P: Where did the government get the money to pay for these contracts?
S: The government sold war bonds to get the money to pay the contracts, so employers could pay salaries to workers, so workers would have the money to buy war bonds.
If this circular argument does not make sense to you, have you ever considered that the government created the money that started this process rolling? The circular process was created so that the government wouldn’t have to create even more money than they were already creating. Too much money for workers to use to buy consumer goods that we could not produce because we were fighting a war would have produced inflation. If we would have had inflation, no more consumer goods could have been produced. All the real resources were in use already for the war effort.
After the war was over, we needed to have money in the pockets of civilians so that they could buy consumer goods that could be manufactured by returning veterans who needed jobs. People redeemed their war bonds, and kept the economy rolling. How come USA politicians were so smart in and after the war, but they lost all their smarts since then?
Unlike World War II, with the Green New Deal we won’t be blowing up what we just built with great expense of personal energy, natural resources, and capital resources. The Green New Deal stuff we build will produce economic benefits for society, and we can use more money to build more stuff that produce economic benefits rather than replacing what we blew up. The economic benefits will include the ability to make more consumer goods to satisfy the demands of the people who now have more money that the government created to pay for the Green New Deal. That’s supply side economics to prevent inflation.