MONETARY POLICIES Stuart Holland observes:
“While Piketty is concerned to highlight differences between his proposals and those for a Green New Deal, the real difference between them is that his— however
well-
intentioned— are a wish list for a new treaty, a new institution and taxation of wealth and income. A Green New Deal needs neither treaty r e v i s i o n s nor
new
institutions and would generate both income and and
direct indirect
taxation from a recovery of employment . It is grounded in the precedent of the success of the bond-funded, Roosevelt New Deal which, from 1933 to 1941, reduced unemployment from over a fifth to less than a tenth, with an average annual fiscal deficit of only 3 per cent.”
Roosevelt’s New Deal was largely funded through the Reconstruction
Finance Corporation (RFC), a public
The US Green New Deal envisions funding with a combination of the Federal Reserve and a system of new public banks
roads, bridges, dams, post offices, universities, electrical power, mortgages, farms, and much more; and it funded all this while generating income for the government.
A System of Public Banks and “Green QE”
Te US Green New Deal envisions funding with “a combination of
financial institution set up earlier by President Hoover. Its funding source was the sale of bonds, but proceeds from the loans repaid the bonds, leaving the RFC with a net profit. The RFC financed
FX
the Federal Reserve [and] a new public bank or system of regional and specialized public banks,” which could include banks owned locally by cities and states. As Sylvia Chi, chair of the legislative committee of the California Public Banking A l l i a n c e , explains on
Medium.com:
“The Green New Deal relies on of
a
network public
banks — like a decent ra l i zed version of the RFC — as part of the plan to help finance the contemplated p u b l i c inv e s tment s. This approach has worked in Germany, where public
banks
have been integral in financing renewable energy installations and energy efficiency retrofits.”
Local or regional public banks, says Chi, could help pay for the Green New Deal by making “low-interest loans for building and upgrading infrastructure, deploying clean energy resources, transforming our
food and transportation systems to be more sustainable and FX TRADER MAGAZINE April - June 2019 55
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