The frontrunners for the Democratic Party’s nomination unveiled their ambitious plans to destroy the U.S. economy for the noble cause of saving the planet on CNN last week. Most candidates’ plans, as one would expect, have quite impressive price tags. For example, Sen. Cory Booker’s (D-N.J.) plan to shift the country to 100 percent carbon-free electricity by 2030 and to a 100 percent carbon-free economy by 2045 would cost approximately $3 trillion. If you think that’s too much, just remember that whenever a Democrat wants to spend taxpayer money, the sky's the limit. Sen. Kamala Harris (D-Calif.) proposed a $10 trillion climate plan and Sen. Bernie Sanders (I-Vt.), adopting the “Green New Deal” as part of his presidential agenda, demands $16 trillion to “(reach) 100 percent renewable energy for electricity and transportation by no later than 2030 and complete decarbonization by 2050 at latest” and to “directly invest an (sic) historic $16 trillion public investment” . These proposals are utterly dangerous for the U.S. economy and shouldn’t be taken seriously because of how economically unrealistic they are.
It seems like the Democrats forgot about the ever-increasing national debt. The debt interest payment is already at about 1.4 percent of the country’s GDP. The Committee for a Responsible Federal Budget projects that it will rise to 3.3 percent of GDP by 2028, a modest sum of $965 billion. Given the fact that the expenditures associated with social security will for the first time “exceed its total income,” government funding will already be stretched too thin for the Democrats’ proposals. And since Hauser’s Law dictates that federal tax revenue will always rest around 20 percent of GDP, Democrats’ aggressive tax plans may fall short.
That, of course, means more deficit spending if any of those programs are signed into law. Don’t forget that most Democrats want to add expensive entitlement programs on top of their climate plans. Free college, free healthcare and universal basic income — you name it, they’ve offered it. Combined with the military budget and mandatory spending, these climate plans seem ever more improbable.
At some point, we’ll be left with two options. First, we could print money to pay debt interest, as has been done several times around the world in recent history. For example, when Zimbabwe tried doing this, it resulted in a hyperinflation of more than 79.6 billion percent and the abandonment of their national currency. Our second option would be to default on the debt. The 1998 Russian financial default, or a formal declaration that the government cannot pay back its debt, showed us that decision wouldn’t be very beneficial because it caused their banking system to collapse and launched an all time high in unemployment rates. As a bonus to the mentioned adverse economic effects of a default, the world would also lose confidence in the dollar.
The thought that the United States can save the world by destroying its economy may be prevalent in today’s Democratic Party, but it’s plain wrong. The U.S. contributed about 15 percent of all global carbon dioxide emissions in 2014, while China, Russia and India combined contributed 42 percent of all emissions. None of these three countries is willing to transform its economy. Vladimir Putin even said that he feared that wind power plants would cause “worms to come out of the soil,” and he asked “how many birds are dying?” at a televised conference. Climate change is an issue that can only be solved collectively, but with all the other major contributors refusing to chip in, such drastic efforts by the U.S. are not effective.
Germany is one of the world’s leaders in green energy. On Jan. 1, 2018, renewables covered 100 percent of German power use for a single day, and the country used renewable energy for 47 percent of its power in the first five months of 2019. While German carbon dioxide emissions have dropped over time, the decline was not as drastic as expected. From 1991 to the implementation of the green energy initiative in 1999, carbon emissions decreased by almost 16 percent. After the program’s implementation, emissions only decreased by 12 percent through 2014, and experts claim that the recent decrease is not thanks to renewables, but to warmer weather. So, we can assume that green energy might not solve the existing carbon emissions crisis. While Germany is just one country, its example suggests that renewable energy may not be as effective as Democrats may think.
The Democrats may claim that the cost of inaction is very high, but I would say the cost of their proposed action is even higher.
Daniel Krinichanskiy (22C) is from Moscow, Russia.
