Comment by dragonwriter | Hacker News Reader

Comment by dragonwriter | Hacker News Reader

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> Just look at the Green New Deal. If they truly thought of it as an emergency, they wouldn't pass highly controversial legislation with all sorts of policies with zero bipartisan support.

That...makes no sense. If you think its an emergency, and a faction which includes all of the members in office in the opposing political party thinks it is not an emergency, pretty much any policy aimed at dealing with the emergency is going to be both “controversial” and “have zero bipartisan support”.

But the Green New Deal isn’t intended to address one such controversial emergency, but two current ones (plus a third, less controversial, one):

(1) A climate emergency (hence, the “Green”),

(2) An economic emergency not in aggregate output but distribution (hence, the “New Deal”),

and:

(3) The potential economic emergency, both aggregate and distributional, that would be produced by a narrow, naive approach to the first emergency.

So, yes, it has lots in it that isn’t germane to the first emergency, especially viewed narrowly.

There is a savings glut in the US. Automation, urbanization, pension funds, trade deficits, and dozens of more factors cause an excess of savings. Savings are just deferred spending. If someone doesn't spend, then someone else doesn't work. That's how you get an economy with high unemployment. Alternatively, you invest the savings. Yields go down, price earnings shoots up. Turns out, the market is already saturated and there are no investments left. There is nowhere for the money to go. So institutions buy government bonds even if some of them have negative yields. When you buy us treasury bonds, then you are saying "I want the US government to have my money because it can invest my money better than me". How does the US government tap into that money? They are bonds, the government has to go into debt to access the money.

This was the prologue so you understand that the US government absolutely must invest. So, what is the US government going to invest the money into? The goal is to produce a reasonable return (1% above inflation). The first obvious choice is education because it ensures that the USA will have a highly qualified workforce in the future. USA is the tech center of the world so anything that strengthens it will ensure a bright future for the US. The second obvious investment choice are green investments. It really doesn't matter what you invest here because fighting climate change is like defending your nation against a foreign army. If the nation is destroyed, there are no returns to be had. If nuclear power is effective then that's how it is but renewables look like a much faster way to deploy the savings. One should question why these obvious investments aren't being made if there is a savings glut. It's because they aren't considered investments. Fossil fuels are still too competitive even though it is obvious that they will fade away over the next 20 years.

Of course you can also do generic infrastructure investments. They'll probably net a reasonable return as well. I feel like stimulus checks do help with unemployment because they boost consumption but they aren't sustainable in the long term. It's possible that the savings glut goes away and then the debt becomes unsustainable, which is why the money should be deployed with an intention to net a return.

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