As of 2019-2020, the Core Sanders has been supplemented by an “Expanded Sanders” program comprising the Green New Deal (GND), a federal job guarantee, a wealth tax, and a plan to abolish and forgive student-loan and medical debts. Of these four policies, the first two would be expansionary or stabilizing in their economic effects. The third is, in my view, impractical, and the fourth is perhaps more far-reaching than is generally appreciated.
By boosting incomes without creating new consumption goods, the GND is similar to an industrial mobilization for war. The increase in income from GND-related activities will be partly offset by a decrease in wasteful finance, private health insurance, and excessive medical provision (somehow defined), as well as reductions in military spending consistent with ending America’s forever wars.
But how, then, would the GND be funded? True “financing” is a matter of real resources, not scrounging for tax revenue. As noted above, those real resources would come from cutting back on finance, health insurance, unnecessary medical provision, and the military, and by mobilizing residual unemployed and underemployed workers toward more useful and necessary activities. Tax revenue would then come from these workers’ earnings, and from more effective levies on the profits of the companies that employ them.
Among the circumstances likely to face a Sanders administration in 2021 are those left over from the 2008 financial crisis, which gave way to a decade of slow but steady growth, accompanied by a broad reduction of unemployment. The decline in the unemployment rate partly reflects an aging workforce and decreased immigration, but mainly a large increase in new service-sector jobs paying mediocre wages. As a result, an ever-growing number of US households have come to rely on multiple earners to make ends meet.Meanwhile, neglect of public investment has accelerated physical decay in many parts of the country. Mitigating and adapting to climate change demands major investments, and a large share of the available physical resources will need to be committed to carrying out a successful transition to a clean-energy economy. Obviously, this has not happened under Trump.
Sanders Can Do It
Whether an economic program as a whole succeeds or fails largely depends on how its various components add up. Based on a general evaluation of Sanders’s agenda, it appears that a reasonable answer to the question of whether he can do it if given the chance is: Yes, he can. The Sanders movement is growing, and the candidate’s program is popular. Equally important, the Sanders agenda is largely coherent as a matter of basic economics, broadly balanced between elements that boost economic growth and those that free up resources, and largely consistent with the broader conditions, domestic and international, that the next US president is likely to face.https://www.project-syndicate.org/onpoint/what-if-bernie-wins-by-james-k-galbraith-2020-01
