We face a diverse array of major environmental challenges, such as scarce resources, that are expected to intensify over the coming decades. In facing these challenges we are handicapped by a variety of constraints imposed by the design of our monetary system. Our reform proposal would help alleviate these constraints and leave us much better positioned to tackle the environmental challenges that loom, both by easing our economy’s growth imperative and freeing up maximum public spending power to make the investments needed to fund an effective “Green New Deal.”
The current monetary system results in the need for continued economic growth, which promotes the unsustainable use of scarce natural resources This growth imperative is a direct result of having to pay off ever-growing amounts of private debt. People often pay off debts by producing more goods and services. Higher levels of private debt therefore tend to promote or even demand higher levels of growth. Conversely, high debt levels also demand growth in order to make payments on the debt, and stifle growth by diverting spending power toward these payments. This contradiction is a major factor that leads to crises. In turn, this production entails additional use of these scarce natural resources. Therefore, the dynamics inherent in the current system, which propel the build-up of private debt (see Private Debt & Recessions and Crises) play an important role in this environmentally problematic growth imperative that exists in our economy.
It’s Time to Mitigate the Environmental Crisis
The political challenges associated with motivating the public to support actions to address long term environmental crises are daunting. These challenges are exacerbated by the constraints imposed by our current monetary system. Reforms are key to maximizing our chances of effectively mitigating the environmental crises on the horizon. A job guarantee would allocate the necessary funding to employ anyone seeking a public sector job, offering salary and benefits. Local governments would administer these jobs and bill their expenses to the federal government.
By limiting bank lending of public funds to public interest uses, our reforms would reduce money creation through private lending and create additional space within the bounds of acceptable levels of inflation to fund further measures to tackle environmental issues.