Imagine that you are AOC and you have finally succeeded in selling the GND to enough people to make it happen. Now the question is, how do we pay for it?
You start with the premises that climate change is an international emergency and that its costs are inescapable, whether you take action to limit it or not; the only question is whether the burden will be distributed fairly or not. Furthermore, there is no plausible scenario in which a large part of the cost will not be borne by individuals as private agents–property owners or consumers–rather than taxpayers. Nevertheless, the subsidies that will have to be part of the program will be paid for with a government check. How will the money be raised?
There are obvious choices: roll back the Trump tax cut or use the proceeds from a carbon tax. The issue then becomes your other spending priorities; there is only so much money to go around. Can you really afford to fund both your red and your green program?
AOC, with some support from prominent figures such as Paul Krugman, apparently believes that the deficit can be ballooned dramatically without increasing interest rates. I don’t agree. Interest rates are a function of investor confidence in the government. A sweeping left-wing program that blows up the deficit is going to provoke a very negative response from the investing public. We may not be Greece or Venezuela, but we won’t be America, either.
And so, I think the GND supporters, in the end, will have to make choices between the red and green parts of their program. Either both will be watered down somewhat, or one will have to be sacrificed.