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
