In their new report.
Green Quantitative Easing of course!
In this way, quantitative easing could be used to increase long-term, sustainable economic activity and with it a huge growth in jobs. The Chancellor, Alistair Darling should announce in his pre-budget report that the extensions in quantitative easing would be used to fund a Green New Deal, as called for by Gordon Brown in the run-up to the G20 meeting.
There are historical precedents in crises for governments to generate debt-free money to fund massive projects, Abraham Lincoln paid for the American Civil War by printing $432 million in new greenback bills, with Congressional authorisation. The French revolutionary government was financed by the creation of assignats.
Those might not be the very best of examples you know…..
To his admirers, Abraham Lincoln (1861-1865) is remembered as “the Father of the Union.” But the first Republican president was an inflationist in monetary affairs, and his policies led to consequences that are still visible today. To pay for the Civil War, Lincoln abandoned specie and launched a paper dollar (the “greenback”) that resulted in rampant price inflation.
The Civil War led to an enormous growth of federal spending, from $66 million in 1861 to $1.3 billion four years later. Lincoln tried to finance the war initially with government bonds, but public demand for specie payments led to their suspension at year’s end. Lincoln took advantage of the fact that the United States was on an inconvertible paper standard by signing the Legal Tender Act of 1862, which authorized greenbacks to pay for the war. Initially limited to $150 million, a second $150 million issue was approved in July and a third $150 million issue passed in early 1863. By mid-1864, greenbacks were worth 35 cents in gold. But at war’s end, they had risen to 69 cents on the prospects of future gold redemption. Prices rose 110.9 percent from 1860 to war’s end.
(A biased source I agree but the facts are as they are).
Assignats were worse:
Assignats were paper money issued by the National Constituent Assembly in France during the French Revolution. The assignats were issued after the confiscation of church properties in 1790 because the government was bankrupt. The government thought that the financial problems could be solved by printing certificates representing the value of church properties. These church lands became known as biens nationaux. Assignats were used to successfully retire a significant portion of the national debt as they were accepted as legitimate payment by domestic and international creditors. Certain precautions not taken concerning their excessive reissue and comingling with general currency in circulation caused hyperinflation.
Originally meant as bonds, they evolved into a currency used as legal tender. As there was no control over the amount to be printed, the value of the assignats exceeded that of the confiscated properties. This caused massive hyperinflation. In the beginning of 1792, they had lost most of their nominal value. In 1796, the Directoire issued Mandats, a currency in the form of land warrants to replace the assignats, although these too quickly failed.
Don\’t forget, these are the examples that the Green New Deal themselves put forward as evidence of the likely success of their plans.
One doubling of the price level in 5 years and one hyperinflation followed by a second hyperinflation…..these they think are recommendations?
Yes, by the way, Richard Murphy is involved here.
We also get the £25 billion from tax avoidance in tax losses. Even Murphy\’s own report this figure comes from says that £25 billion is the summation of Parliament\’s intentions, tax planning, tax avoidance and tax evasion.
They seem to think a Tobin Tax would raise £400 billion a year: that\’s so cute of them. They\’ve obviously not understood the implications of that Austrian think tank (no, not government) report.
We believe it essential that part of this wall of money, much of it saved in funds that create no new investment in the economy, has to be used more constructively to create a Green New Deal.
Y\’see, pensions savings are often invested in extant shares and bonds. Thus they don\’t mean \”new investment\”, just that ghastly secondary market. But, we, we will be different! Green Bonds!
It must be liquid so that people can buy in, knowing with confidence that they can get their money back when they want.
Which means that people must buy Green Bonds on the secondary market because for each seller there must be a buyer. Which means that, after the initial burst, the vast majority of the Green Bonds will be trading in the secondary market and not providing any new investment (the stock is of course, after a few years, going to be hugely greater than the flow, by definition almost).
Meaning that we\’ve just replicated the financial markets at great cost and to no effect. Aren\’t we wonderful!
This is also excellent, about Green savings vehicles:
It must be capable of paying real rates of return.
Well, yes, but that\’s the problem, d\’ye see?
Without carbon taxes or cap and trade, green investments can\’t pay a real rate of return because they\’re more expensive than not green projects. This is the classic externalities problem of course.
But once we\’ve imposed either carbon taxes or cap and trade, thus priced the exteralities into market prices, we don\’t need to have green bonds or green investment schemes. Because our traditional savings and investment methods will do just fine, for such green projects will now be capable of paying real rates of return.
In short, the plans either won\’t work or they\’re not needed.
Anyway, I\’m bored with these fools and knaves now. It becomes tedious continually pointing out that these idiots simply don\’t understand what it is that they\’re pontificating about.