The Green New Deal

The Green New Deal is the latest buzzword in American politics. The idea has been floated by Alexandria Ocasia-Cortez and has become very popular amongst all Democrats. Almost all the Democrats who plan to run for President have come out in support of the Green New Deal. The idea has also found a lot of takers amongst left-leaning lawmakers and individuals.

At the same time, the idea of the “Green New Deal “has come under a lot of fire from Republicans who are equating it with socialism. In this article, we will have a closer look at the concept of the Green New Deal as well the economic impact it is likely to have.

What is The Green New Deal?

The New Deal was a historic program which was undertaken by President Franklin Roosevelt after the Great Depression. Under the new deal, the government of America spent a lot of money on infrastructure projects and other such reforms in order to prop up the economy.

The Green New Deal seeks to emulate the changes that were brought about by the New Deal. Hence, the Green New Deal is also a government-sponsored program. It also seeks to make drastic changes to the infrastructure of America. However, while doing so, the Democrats want to focus on renewable energy and resource efficiency. Hence, the Green New Deal is a sort of amalgamation of two ideas. It aims to solve the problem of climate change and in the process prop up the failing American economy.

What Steps Need To Be Taken Under The Green New Deal?

One of the problems with the proposed Green New Deal is that it plans to achieve too much in too little time. This is the reason why it appears more like a wish-list and less like a plan. Some of the most prominent objectives of the green new deal are as follows:

  • The United States should be able to function with a net-zero emission of greenhouse gases
  • The United States should be able to produce so much renewable energy that its economy should be able to function normally using renewable sources of energy. This means that the usage of fossil fuels will have to be eliminated
  • Air travel is a major contributor to climate change. Hence long-distance air travel should be reduced by trains or other means of transport wherever possible
  • Each and every building in the United States will have to be upgraded or rebuilt in order to make sure that it is energy efficient
  • Each and every citizen of the United States should be entitled to clean air and water

The Green New Deal wants to accomplish all the objectives mentioned above and many more within the span of a decade!

The Problems with the Green New Deal

If one reads all the points mentioned above, it becomes obvious that the Green New Deal sounds too good to be true. Obviously, there are a lot of problems with this deal. Some of them have been listed below.

  • Things People Will Have to Give Up: The Green New Deal plans to outlaw a lot of things that people like. For instance, it plans to outlaw the usage of planes, dairy and even certain kinds of meat. The use of fossil fuels may also have to be reduced using government intervention instead of the market approach. If economic history is anything to go by, all this would mean an economic disaster. The effects would be similar to prohibition and would end up creating a black market. The reality is that if people really want to consume something then outlawing the product won”t really solve the problem.
  • High Public Debt: The Green New Deal would mean undertaking a huge public sector endeavour. A lot of the work that needs to be done will have to be done by government agencies. It is a known fact that government agencies are usually the most inefficient at performing any task. The maximum wastage of funds happens when government agencies are entrusted with the task of executing a plan. This means that if the Green New Deal were to really come into effect, the government would have to borrow a lot of money in order to make it a success. This would end up creating a lot of problems for the American Treasury which is already burdened by crushing national debt. Also, the plan to raise a lot of debt is not in sync with the Federal Reserve”s plan to raise interest rates. If both the Green New Deal and the rate hikes happen simultaneously, the government will find it difficult to service its debt.
  • High Inflation: If the government undertakes a lot of debt and spends it into the market, a lot of inflation would be created. The Green New Deal also plans to use government power to outlaw many cheap alternatives such as fossil fuel. Also, if the government creates a lot of high paying jobs, there would be an incredible amount of wage inflation. All the provisions mentioned in the Green New Deal seem to have an inflationary tendency.
  • Impossible Deadlines: Lastly, the Green New Deal plans to achieve a lot of very diverse objectives within a short span of time. Given the scarcity of resources as well as money, it does not seem like the Green New Deal is feasible or even well thought through.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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