We all know that Vermont Sen. Bernie Sanders isn’t exactly a genius when it comes to economics, but now he seems to be having problems with basic addition.
With his latest proposal for a “Green New Deal,” Sanders is suggesting that we should employ more people than we actually have, and that we’ll somehow all make a massive profit. This is not, to put it mildly, how either basic arithmetic or more difficult economic analysis actually works.
The argument that we need to do something about climate change seems sensible enough, and many economists support a carbon tax. This, of course, isn’t nearly radical enough for the senator. He wants to plan everything, god forbid we let sensible and effective markets do most of the work. So, we get Sanders’ version of the “Green New Deal”, which aims to “[end] unemployment by creating 20 million jobs needed to solve the climate crisis.”
But we already ended unemployment. Well, almost.
The headline number for unemployment is at near record lows. There is always some “frictional” unemployment caused by those transitioning between jobs, but it seems we’re at the level where there are some people moving between jobs but very few unemployed long term. Basically, we’re already close to “ending unemployment” as things stand.
So who exactly would fill these 20 million jobs Sanders imagines?
Of those in prime working ages, there’s barely even 20 million people not working, and that includes all the stay-at-home moms and the rest. So, we’d have a bit of a problem in finding the people to work these newly-created green jobs, unless we want to tell mom to leave her toddlers at home and go install solar panels or something.
Which means, of course, that we’re going to have to take people away from doing other things in order to do our climate fixing for us, at least, under Sanders’ plan. But if we take people away from one job to work a new job then that explodes the senator’s logic on how this all works out financially.
Sanders claims that “this plan will pay for itself over 15 years. … Collecting new income tax revenue from the 20 million new jobs created by the plan.” But this logic only works if the people we’re putting to work aren’t currently working, for the new tax they pay in their new job is offset by us losing the old taxes they paid in their old job. So the idea that Sanders’ plan pays for itself is nothing short of laughable.
Math isn’t everything, but it turns out basic sums really are useful when working out how to pay for a policy proposal. We simply don’t have the spare labor to make Sanders’ plan even remotely feasible.
We might gain 20 million laborers worth of climate change protection, but we’ll also lose 20 million laborers worth of what they do now. Maybe Sanders thinks the climate is more important and wants to do it anyway. But we’ve still got to acknowledge the cost of doing so: losing all that stuff we would have had instead of climate protection. All the faulty logic and inadequate addition aside, a solution to the climate issue will not be brought by the government bureaucrats who run the DMV.
Other than all of that, Sanders’ “Green New Deal” is a great plan indeed.
Tim Worstall (@worstall) is a contributor to the Washington Examiner‘s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at The Continental Telegraph.
