Policy & Economics
In the wake of our successful fight against the climate-killing Trans-Pacific Partnership trade agreement, this workgroup is now working with other organizations around the country to envision and promote a new trade policy in which the health of the climate is of central focus. Sierra Club’s policy paper expressing such a vision is a possible starting point. This policy promotes three main ideas: 1) that trade rules that conflict with existing climate policies should be eliminated; 2) trade rules should increase climate protections; and 3) trade agreements should discourage trade in climate-polluting fossil fuels, and address the climate emissions that result from shipping. Much more on our Trade Policy work here.
Because of its potential for creating a green economy, this group is studying and promoting Modern Monetary Theory (MMT). Such a theory is consistent with and would allow for a WWII-scale mobilization to shift our economy from fossil fuels to clean energy without delay. Using MMT could achieve this without new taxes and without increasing the deficit.
At the heart of MMT is the understanding that “modern” money has existed in the U.S. since 1971, when the country was taken off the gold standard. The dollar is now “fiat” currency, created by banks as ledger entries on their computer keyboards. Banks create money, essentially out of thin air, and then lend this money to the government, charging interest —thus increasing the US deficit.
But we don’t really need the middle man. Governments could just as easily create the money for needed goods and services on their own computer keyboards and then create community grants for community owned projects, including green affordable housing, green energy, and transportation.
The beauty of this approach is that people could be hired almost immediately to create the green infrastructure we so urgently need, eliminating unemployment at the same time. Again, as unbelievable as it may sound, the money created by the government on its computers would be balanced by the goods and services created, and thus it would not need to be “paid back.” Also, as long as there are unemployed people and socially useful goods and services are not being provided by the private sector, modern money is non-inflationary. Eliminating unemployment also strengthens unions’ bargaining positions.
Note too that not only could MMT be used to transition quickly to a green economy, but because the money can be also be spent on a multitude of related social needs, it could help build alliances across social movements for education, healthcare, jobs and pensions.
Bernie Sanders understood the important potential of MMT. In fact, his economic advisors on the Senate Budget Committee and to his presidential campaign were top MMT people.
For more information on MMT: http://www.alannasser.org/articles/howmodernmoneyworks.htm
Here’s a video introduction to MMT for the activist community: