O Tempora!

Coronavirus Government Restrictions: Preview of Green New Deal

Due to the coronavirus (CV) pandemic, much of the US economy has been forcefully shut down to reduce social interaction. The central government has posted guidelines that are being followed in most states. Also, some companies have been forced to produce medical devices and PPE. In effect, government at some level has seized control of most of the economy.

Since the shutdown has caused the private economy to hemorrhage money and people are being thrown out of work, a $2.2 trillion spending law, the CARES Act, has been passed to “help”. This $2.2T is 100% borrowed – because the central government does not have that kind of money in pocket change. The 2020 budget before CV contains a $1T deficit. The CARES Act money will add at least $2.2T to the deficit this year. But it will likely be even more – if the private economy is sputtering along, the government is collecting much less in taxes. The current national debt (the sum of all past annual deficits) is estimated to be $24,235,640,500,000 on April 13, 2020. IF we suddenly stopped borrowing today, and IF we waived all interest on the debt, it would take 768,000 years to pay off.

The Green New Deal (henceforth GND), a document that would make Karl Marx proud, would seize control of all buildings to “upgrad[e] all existing buildings in the United States … to achieve maximum energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification…”. In other words, government would seize control of all buildings. The GND is supposed to provide all electricity and water – but no natural gas, which would be eliminated, despite its low-carbon combustion. It would provide training and education. It would provide housing. On & on & on, with control, control, control.

Sen. Bernie Sanders, one of the GND’s proponents, said it would cost $16 trillion over 10 years. Bloomberg’s Noah Smith estimates it would cost more like $66T over 10 years. And since the GND would actually kill off some industries, the government’s tax base would shrink. If you think the national debt is bad now, imagine what more than doubling the central government’s budget would do to the debt.

Government control and spending to combat CV has drastically reduced our liberties and killed jobs. The CARES act had drastically increased government spending. These are supposed to be temporary, and I hope they are. But the GND would expand government control over us for years – at best. It would do the same for spending – at best. But, as the great economist Milton Friedman said, “Nothing is so permanent as a temporary government program.”

The silver lining of the fight against CV is that it gives us a taste of what the GND would be like – a bitter pill to swallow, indeed.

In any severe emergency, some people feel the need to hoard supplies, and others try to sell items for many times the original prices. While some stores try to ration supplies and the government tries to prevent “gouging”, I think I have a better idea. I call it the Selfishness Surcharge.

Here’s how it works. Retails stores will continue to sell an item at regular price for the first package of the stuff. But the 2^nd package in the customer’s order will cost double what the 1^st does. The 3^rd will cost double what the 2^nd does, the 4^th will cost double what the 3^rd does, etc. So, if hand sanitizer, for example, costs $10 for a large dispenser, and a customer insists on buying two, the charge for the order will be $30. For an order of 3 dispensers, the price will be $70. Four of them will cost $150. And if you really have deep pockets and are really greedy about the item, you will pay $655,350 for 16 jugs of hand sanitizer.

Of course, the customer who wants a lot of hand sanitizer might leave the store after buying a single jug and come back to get another. But the same can be said of store-implement rationing. I think that few would take the time to return, especially when some stores have long lines just to get in.