Can We Afford the Green New Deal?
The Green New Deal's affordability depends on available real resources and productive capacity, not the government's ability to create money.
Mainstream framing
Mainstream economics approaches the Green New Deal through the lens of fiscal constraints and cost-benefit analysis. The conventional view emphasizes that government spending must be 'paid for' through taxes or borrowing, creating trade-offs with other priorities. Economists typically focus on whether the estimated costs (often in the trillions) can be financed without unsustainable debt levels or crowding out private investment. They worry about the fiscal burden on future generations and often propose market-based solutions like carbon pricing as more efficient alternatives to large-scale government programs.
MMT answer
As Nersisyan and Wray argue in their policy brief, the question of Green New Deal 'affordability' fundamentally misframes the issue. For a currency-issuing government like the US, the relevant question is not financial affordability but whether there are sufficient real resources—workers, materials, technology, and productive capacity—that can be mobilized for this climate transition. The government can always create the money needed to purchase available resources; the constraint comes from the real economy's capacity to respond without generating excessive inflation. MMT shows that large-scale government investment programs like the Green New Deal are operationally feasible because government spending creates the very financial resources that enable private sector participation. The real challenge lies in ensuring adequate supplies of critical materials, skilled labor, and production capacity while managing inflationary pressures through careful program design and resource planning.