An often-overlooked source of funding for the Green New Deal is the private sector. Government does not need to foot the whole bill. It merely needs to spend enough, and legislate enough, to trigger a transformation of private investment. Even many liberal and left economists are stuck thinking that government has to pay for the whole Green New Deal, as if it were a welfare program. In reality, government merely needs to do enough to channel ongoing public and private investment in new directions.
The Green New Deal is not some discreet object to be purchased. Rather, it is a process of society-wideeconomic and technical change. The Green New Deal does not mean buying a bunch of new green stuff to bolt onto all the old dirty stuff; rather, it means changing how society invests. It means industrial planning. It means channeling flows of capital away from harmful activities like oil drilling and speculation, into socially useful work like building out the clean energy sector. Even if one ultimately wants to nationalize the means of production, green industrial planning within a capitalist framework is an important step toward deeper changes in our mode of production as a whole.
One very important source of badly misallocated capital is corporate America’s vast hoard of semi-hibernating cash. Last year the Federal Reserve reported that nonfinancial corporations held $4.8 trillion in cash. That sum is equal to almost one quarter of the entire US annual economic output, which last year was $20.5 trillion. And this $4.8 trillion in cash is only a subset of a larger, less liquid, hoard of $22.1 trillion worth of financial assets held by nonfinancial corporations.