Green New Deal would fail, just like the original New Deal

By David A. Ridenour

Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez recently issued a resolution declaring a climate change emergency. The move is another attempt to raise support for Rep. Ocasio-Cortez’s Green New Deal, a plan to halt climate change by transitioning America to clean energy sources within just 10 years. 

Like its 1930s namesake, the Green New Deal, or GND, would require massive government interventions in the economy. And just like the original New Deal, it would fail to achieve its main goals. In fact, it would impoverish millions of Americans and decrease living standards nationwide.

The New Deal began in 1933 when President Franklin Delano Roosevelt signed the National Industrial Recovery Act, giving the executive branch the power to set wages and prices across the country. FDR and his advisors believed the federal government could end the Great Depression by pouring money into the economy. The more workers were paid, the more they could spend — and the higher prices were, the more they would have to spend.

Today, many economists and historians agree that these policies backfired. Since government-mandated wage hikes made it harder for companies to pay their employees, total hours worked decreased during the New Deal.

The New Deal raised wages but made it much more difficult to find work. Overall, unemployment was 25 percent higher than it would have been without the NIRA’s interference. 

All told, the New Deal might have prolonged the Great Depression by seven years. The gross national product at the time would have been 27 percent higher without New Deal policies. 

The GND would similarly crush poor Americans today. Low-income Americans already spend a higher than average percentage of their income on energy. These costs will only increase as fossil fuels are heavily taxed. Electricity costs would skyrocket. 

The GND also calls for every home and building in America to be retrofitted for energy efficiency. This could cost up to $100,000 per home and much more for larger structures, resulting in a massive increase in the cost of living. Farmers and ranchers aren’t exempt from the GND, so the plan would cause an increase in food prices as well. 

Wage inflation is also a central part of the GND, which promises to “create millions of high-wage jobs.” As the New Deal era proves, this is easier said than done. Wage hikes increase unemployment.

The Roosevelt administration’s tax increases and labor regulations forced the closure of many businesses. And the GND is similarly shortsighted. To reach zero net-carbon emissions in 10 years, the government would regulate and ultimately prohibit the use of affordable energy sources. This would trigger a massive decline in industrial productivity and result in mass layoffs.

The best environmental outcomes result not from government fiat, but from national prosperity and free-market innovation. The United States has slashed energy carbon emissions by 13 percent since 2005, thanks to its increased reliance on natural gas, which produces fewer greenhouse gas emissions than coal.

The New Deal prolonged the Great Depression it was meant to end. Almost a century later, the GND would prove just as counterproductive. This crusade for environmental and economic justice would actually lead to more pollution and poverty.

David A. Ridenour is president of The National Center for Public Policy Research, a research foundation dedicated to providing free market solutions to today’s public policy problems.

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