Summary Preview: The article casually explains a redundancy from Bernie Sanders Green New Deal but the redundancy is not the focus of the article. The redundancy is mentioned to show where money is intended to be spent that does not serve any benefit to the public. This component of Sander’s plan is also mentioned as it inspired other ideas in the article by causing the writer to consider per head spending. The three main issues facing the people of the United States are identified, climate change, economic inequality, and the representation of popular interests in government. Three solutions are proposed, and the reason why these solutions will probably not be realized is mentioned in this article.
I was reviewing Bernie Sander’s Green New Deal, and there was a redundancy costing in excess of 2 trillion dollars, which is only one of many deficiencies of his GND. The redundancy is spending 2.3 trillion dollars to build the infrastructure for renewable energy, and then spending over 2 trillion dollars to ensure structures meet a standard of energy efficiency maximization.(1) Since the goal of energy efficiency is to reduce carbon emissions, it serves no purpose if you intend to produce carbon free energy, because wasting carbon free energy has no impact on emissions. Energy efficiency becomes a matter of the consumer weighing the cost of improving efficiency verses the cost of paying for wasted energy. The two trillion dollars is for a sliding grant for low and income owners, so this portion of the plan, which has no public value, forces people to make out of pocket upgrades. These upgrades will cause the owners of rental properties to increase the rent to cover the cost of these upgrades, which seems in conflict with the social justice fervor that Bernie performs with.
I do support the spending for renewable energy infrastructure although not much else in his Green New Deal. Sander’s GND is the packaging of his positions into primarily a shopping list to capitalize on the popularity of the term: Green New Deal. Sander’s intends to place the power generation and storage infrastructure under the authority of the Power Management Administrations, which presently manage the sale of energy generated from federally owned sources. I was critical of the Obama subsidies because they used public funds to build infrastructure which goes on to be owned by private companies, and usually with very minimal investment from the company compared to the cost of these projects. Obama should have purchased the infrastructure out right, placed it under the authority of the PWAs, and then used the profits from the sale of this energy to the utility companies to perpetually expand and grow renewable energy infrastructure.
Under Sander’s plan you create a situation where the public owns somewhere between 85% of power generation, which it sells to utility companies who provide it to the people. You have a situation where the profits can be reinvested to ensure the capacity to supply is always far ahead of demand. The cost becomes fixed to maintenance and expansion costs. Cost could also include a redistributive profit percentage. Inflate the price to the utility company 10% above anticipated cost of maintenance and expansion, and this money is used to offer people in the lowest however many percent, rebates on their electric bill. Which brings me to the main point of this article.
The reason I don’t support progressives aside from their inauthenticity, is their ideas are aimed at inefficiently spending money to provide usually the most minimal relief for people trapped in disadvantaged circumstances. They want to spend money in ways that do not address the circumstances that leave people trapped. 2 Trillion dollars is a great deal of money, roughly 10% of GDP, and 50% of the federal budget. In fairness the section of the GND where this expenditure is mentioned, also includes replacing mobile homes with modular houses, so the grant for weatherization is not 2 trillion dollars. Which is another interesting point regarding the plan, because there are 20 million mobile homes, which cost on average $225,000 for homes of comparable square footage. Meaning 2 trillion is not enough money to replace all mobile homes, much less replace the homes and offer grants for weatherization and retro fitting.(2)
What I’m leading into is more in line with the Andrew Yang’s plan to provide a guaranteed income, although a guaranteed income is not what poor people need. Yang’s plan calls for a 3 trillion dollar annual expenditure and includes everyone. He should know that the top 20%, not only do not need $1000 dollars additional income, they will not be persuaded by $1000 of additional income when their interests are more concerned with the tax rate, which is of greater value than $1000 per month.
What poor people need is money, and they don’t need it incrementally, they need it in lump. My criteria for poor is the bottom 40% of the wealth distribution who possess basically no wealth (.1% collectively, the bottom 30% negative .3 percent.).(3) The reasoning is wealth is the accumulation of surplus income. People whose income only meets their expenses and for many does not, are in a condition that is poor by definition: “lacking sufficient money to live at a standard considered comfortable or normal in society.”(4) If you don’t have enough money to meet your expenses you are neither living at a level that is comfortable nor normal. At least not for the time being, as normal could change if more than 50% of the population possess no or negative wealth. We are somewhat already there based not only on the bottom 50% possessing only 1.2 percent of the wealth distribution, but based on the individual median income in consideration of expenses.
When we hear about median income we hear it in terms of household income, and the average household size in the united states is 2.6 people.(5) People hear $60,000 and for many it seems like a high number, but only because the number represents more than 1 person’s income.(6) The individual median income is only $31,000 per year.(7) There are few places in this country a person can live comfortably on $31,000 per year, which is of course why people have roommates or remain in committed relationships. The lowest cost of living in the United States is New Mexico, which is $41,300 per year. Meaning half the people in this country couldn’t afford to live on their own in New Mexico.(8) This cost of living figure represents the state average, and there are of course ghettos across the country where people live on less, but it does establish that poor can probably be considered more than 50% of the country. Based on the fact that at least half the people in this country couldn’t afford to live alone in the state with the lowest cost of living.
What I propose is an allocation of 1.5 trillion dollars to be distributed to the bottom 50% of the country which has a number of benefits and potentials to reduce spending. Ill discuss the funding aspect of it once I describe a possible distribution mechanism and explain the benefit and effects. I would create three tiers from the bottom 50% of income earners. The bottom 20% the middle 10%, and the top 20% of the bottom 50. The purpose is to ensure a distribution that maximizes the servicing of need. The bottom 20% 800 billion, the middle 10% 300 billion, and the top 20% 400 billion. Per head the bottom 20% will receive $16,000 each, the middle 10% $12,000 each, and the top 20% $8,000. A lump sum exempt from inclusion into the individual’s taxable income. When we think about government spending on a per heard basis, think about the bank bail out under Obama, 700 billion dollars. Even 700 billion is enough to provide the bottom 50% of income earners with roughly half of what is listed above. Again, Sander’s GND calls for 2 trillion on increasing the energy efficiency of buildings, which has zero impact on climate change in a country where energy is produced from renewable sources, and a very limited impact on the lives of most who could benefit from such spending.
Before I get into the economic implications and the funding, the benefits of a lump sum verses an installment begins with relief of stress from economic obligations. For people who are in the bottom 50% of the income distribution, financial stress is nearly ever present. People are constantly concerned about having the funds to meet obligations, current, future, and possible. The amount of money being provided is enough to relieve the concern of having money to meet expenses for a person who has been living on a qualifying income. In the absence of that stress people are in a position to think about their interests, and are also possessed of the means to create their own opportunity; reflective of an Adam Smith quote I read years ago “Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little.”(9) Some will start businesses, some will pay off creditors, some will take a vacation, purchase transportation, pay off fines to get their license, make some purchase they wouldn’t otherwise have been able to make, and some will save it for the peace of mind it provides. Whatever is done with the money, it improves the quality of life of disadvantaged people, and provides them an opportunity to improve their circumstances.
The funding justification is based on the role of the US dollar as the world’s trade currency. As the global economy grows there is an ever increasing demand for dollars, as nations and private entities need dollars to make international purchases. The increasing demand for dollars sustains US debt. In an emergency the law that prohibits the sale of treasury bonds directly to the federal reserve can be repealed, and if the need for funding outstrips demand for treasury bonds, the treasury can force the federal reserve to purchase treasury bonds. Or the treasury can create the money to make up for that shortfall. The point being, it isn’t outside the ability of the US to provide an installment of balance to create opportunity for those most trapped by disadvantaged circumstances once every 5 to 10 years. The act of balance will also lead to economic growth including promote social mobility which has the potential to increase tax revenue.
In regard to the budget, this underclass economic stimulus, will reduce reliance on government programs, meaning some of the funding will be gained back as programs require less funding. In general, it is much better for poor people to be given money which provides them the choice to decide what they want as opposed to seeking out what help is available and on what terms. It has the potential to reduce the size of government and money wasted on bureaucracy, although this effect depends on reoccurring implementation.
I presume the greatest critique of the proposal would be the potential for inflation. I don’t know what the inflationary effects would be but it certainly wouldn’t outweigh the benefit derived from the sum to the bottom 50%. The question is whether it would impact the value of the dollar enough to affect the lives of people in the 50 to 70% of income earners, and I think the answer is no. I base this answer on the diversity of spending, including paying creditors and saving which will have no inflationary impact.
This is something that can be done once every few years as needed but changing the qualification. Income should be the measure of the first wave, where money is distributed to the bottom 50% of income earners, and then maybe 5 years later the bottom 50% of the wealth distribution, and using the wealth distribution as needed in the future.
What we need is Bernie Sander’s plan to transition to renewable energy. Not his Green New Deal, but the element of it to build the infrastructure, regulate fossil fuel generation of power out of existence, and place the infrastructure under the authority of the PMAs. The public should own the infrastructure they pay for, and the transition to renewable energy has existential implications for the future of human civilization. There are also the previously mentioned benefits of price controls based on maintenance and expansion costs, and low profit to subsidize the cost of electricity to low income people.
We also need a balance stimulus similar to what I’ve proposed here. This more than anything else will eliminate the divisions along racial, gender, ethnic, sexuality, and many other lines that are over emphasized. When you have the money to do what you want to do and to create your own opportunity you’re less concerned with the advantages and perceived advantages of other people. It will reduce discontent in general, as well as crime including random incidents of mass murder. Income inequality is the number one driver of crime including homicide.(10) A lump sum has a greater potential for individual’s to improve their income, than does providing a $1000 guaranteed income which does nothing to improve income inequality. The lump sum, is potentially a key for circumstantially trapped and disadvantaged people to open the gate to social mobility and other quality of life related opportunity.
Of course neither Bernie’s plan to transition to renewable energy, nor a balance stimulus has any real chance of passing congress. Bernie’s plan will drive fossil fuel power plants out of business, and impact the sales of companies that sell fossil fuel, as well as some other businesses on the periphery. Fossil fuels are an imbedded interest which will maintain enough control between both parties to ensure their interests are protected.
The balance stimulus could benefit from support from a number of sectors of the economy which would benefit from an empowered consumer, including the financial sector (anticipation of payment of debts) and the retail sector, but I don’t know if the interest would translate into organized and overt support for the idea to congress. The measure also challenges the power structure, not legislatively, but economically, as half the population will potentially be in a position to create their own opportunity. $16,000 isn’t a lot of money, but for someone with a skill or an idea, it is enough to start the business they always wanted to start, but have been unable to because their wage barely meets their monthly expenses. It will lead to the creation of small businesses, and reduce reliance on employers, which will potentially change the labor market as employers are forced to compete with more employers and smaller supply of labor. It isn’t in the interest of big business to have a workforce with options, and increased competition in the market.
Regardless of whether or not these two ideas could be realized in congress, people still need Centers for Economic Planning, and it may be the only way these ideas can be realized. A Center for Economic Planning is basically a company that owns businesses, owned by the people in the city, county, or metropolitan jurisdiction it is created for. Funded by a small tax the company purchases and creates businesses at the direction of the public. The public elects management, and also has direct input and oversight into the investment strategy. It allows people to participate in major decisions of production, increases the amount of opportunities that exist, as well as the quality of opportunities. The profits from the owned businesses aside from being reinvested can be applied to any purpose the public chooses, which includes influencing politics. This creates democracy in a system where the representation of interest requires money to be represented, and where an ample supply of money is required when an interest is adverse to the interest of an industry. Wealth is generally determined by ownership of capital assets, meaning in order for popular interests to be represented, the population must popularly own capital assets roughly equal to what is owned privately in any one economic sector. Although popular ownership through a Center for Economic Planning is private ownership, since the CEP is a private company, owned and directed by the residents within the jurisdiction it is created.(11)
We can reduce the major problems of the United States to climate change, economic inequality, and representation in government, which includes foreign policy as well as domestic programs and legislation. Instead of focusing on these problems which contribute to the cause of other symptomatic issues, attention is directed to inflate the significance of minor problems, either to ensure the interests politicians do represent are maintained, or because they are incompetent.
None of these issues are likely to be addressed and it begins with the people of the United States, who not only lack the understanding for effective civic participation, but are uninterested in understanding these subjects. The reason is people prefer to live in a reality based on what they want to be true, and avoid true information, mainly because it compromises the value of something they have a high value of. Value is compromised by showing what a person believed was true, is false, or what they believed was good, is bad, or insignificant. Whether a party, a position, policy, a principle, etc, the value of these subjects is a part of an individual’s truth, and is associated with the value an individual has of his or herself. This fear and discomfort associated with information that challenges one’s beliefs, causes people to avoid such information, and they will ignore it if it does come to their attention.
People prefer to believe what they want to believe and refuse to allow the truth to compromise their preferred set of facts. As a result, media and publishing intent on attracting viewers and earning money through the subscription to their publications or advertising, adopt popular lenses to maintain their viewers. People are interested in reading and hearing about what they want to be true, and publishers and media outlets are interested in giving people what they want to maintain profit.
No change is coming despite empty promises constructed through noble rhetoric and short sighted grandiose ideas. It isn’t the 1%, the 1/10th of one percent, the racists, the bigots, the lobbyists, the NRA, leftist media, the right wing media, or any other vilified fragment in this country. It is everyone, in their loyalty to things they want to be good or true, being greater than their loyalty to what is true. Many people’s bias are reinforced by the propensity of people to interact intimately almost exclusively with people of their own socioeconomic position. Their subjective experience excludes the difficulties many of us face, and so for those whose lives are good, the only concerns are those promulgated through bias publications which reinforce the indoctrination and experience of a large portion of the population. This illusion is aided by the value of appearing well before others, where people conceal struggles and feign happiness for the perceived value it has in the minds of others.
1: https://berniesanders.com/issues/the-green-new-deal/ “We will spend $1.52 trillion on renewable energy and $852 billion to build energy storage capacity.” “We will provide $2.18 trillion for sliding-scale grants for low- and moderate-income families and small businesses to invest in weatherizing and retrofitting their homes and businesses. Weatherization will reduce residential energy consumption by 30 percent.”
2: http://orioncs.net/bernie-sanders-green-new-deal/ The following are notes from another article that serve as the sources for the cost of replacing mobile homes with modular homes. A: BBC 9/24/2013 “Why Do So Many American’s Live in Mobile Homes?”, Tom Geoghegan. “Estimated 20 million American’s live in mobile homes”. (https://www.bbc.com/news/magazine-24135022) B: Mobile Home Sell 11/17/2017 “Mobile Home Sizes and How to Choose the Best One for Your Family”, by Bryceadmin. Single wide’s range in size from 600 square feet to 1300 square feet, double wide’s range from 2000 to 2500 square feet. The average of 1500 square feet is a conservative estimate for ease of math, as the average between 600 square feet and 2500 square feet is actually 1650 square feet. Additionally, there are triple wide mobile homes as large as 4500 square feet but were excluded from the average based on the presumed rarity of these structures. (https://www.mobilehomesell.com/mobile-home-sizes/) C: Home Advisor “How Much Does it Cost to Build a Modular Home?”. “This breaks down to a price of $100 to $200 per sqft…” (https://www.homeadvisor.com/cost/architects-and-engineers/modular-home-prices/)
3: Statista 8/9/2019, “Wealth Distribution in the United States 2016”, by Erin Duffin. https://www.statista.com/statistics/203961/wealth-distribution-for-the-us/
4: Oxford Dictionary https://www.lexico.com/en/definition/poor
5: Arcgis 8/5/2019 “2019 USA Average Household Size” by Esri https://www.arcgis.com/home/item.html?id=b597302950234000b7ba4fa33cd785eb
6: United States Census Bureau 9/12/2018 “Income, Poverty, and Health Insurance Coverage in the United States 2017 ($61,372) https://www.census.gov/newsroom/press-releases/2018/income-poverty.html
7: Federal Reserve Bank of St. Louis, 9/13/2017 “Real Median Personal Income in the United States”. https://fred.stlouisfed.org/series/MEPAINUSA672N Source: US Census Bureau $31,099 Individual Median Income
8: USA Today 5/10/2018 “Cost of Living: The Purchasing Power of the Dollar in Every State”, by Michael B Saunter. https://www.usatoday.com/story/money/economy/2018/05/10/cost-of-living-value-of-dollar-in-every-state/34567549/
9: Adam Smith, 1776 “The Wealth of Nations” Book I, Chapter IX, pg.111
10: The Relationship Between Poverty and Crime: A Cross Section Analysis of the World. Bryant Economic Research Paper Vol.4 Spring 2011, Luke Fleming: pg 12 “once again crime and income inequality are highly correlated”. (Referring to comparative data between nations using the gini coefficient and the rate in which crimes occur.) Pg 13 “this shows a positive relationship between homicide and income inequality. Pg 14 “Income inequality is positively related to all three types of crime. As money is distributed more evenly, all three types of crime should decrease”.