Study Estimates the Green New Deal to Cost $93 Trillion — That's a Conservative Estimate

Robert P. Murphy

Both fans and foes of the so-called Green New Deal (GND) agree that it is a wildly ambitious set of proposals, which—by design—will involve the federal government spending boatloads of money. In fact, the GND is so expensive that Rep. Ocasio-Cortez has cited the inflationary doctrine of Modern Monetary Theory (MMT) to deflect the issue; we don’t need to worry about the cost of the Green New Deal, so the argument goes, because the Federal Reserve can create an unlimited number of dollars.
Even so, more sober-minded policymakers, as well as the general public, should be aware of just how ludicrously expensive the GND really is. A recent analysis by the American Action Forum puts the initial 10-year cost at a staggering $93 trillion. Although the reader might understandably assume that this is an inflated figure designed to discredit the GND, it actually rests on a few conservative assumptions. The figure of $93 trillion is admittedly absurd, but that’s only because the planks of the GND are absurdly expensive. The American Action Forum estimate is entirely fair.

The Major Components of the Green New Deal

The American Action Forum is headed by Douglas Holtz-Eakin, who—among other positions—was the director of the Congressional Budget Office (CBO) from 2003 to 2005. One can of course disagree with his team’s analysis, but their approach to “budget scoring” the GND is entirely conventional in DC circles.
For their analysis, the AAF team focused on six major planks of the GND that they considered tractable for quantification. The table below summarized the various cost estimates for each of the six items:

Source: American Action Forum

Notice that there are many items listed in the GND documentation that are not included in the table above. This is one reason that I have called their cost estimate conservative.
Another important point is that the absurd $93 trillion figure is not driven by one particular modeling choice. On the contrary, five of the six components studied by the team have a (10-year) cost exceeding $1 trillion. So even if it turns out that, say, the AAF team is totally wrong on the cost of Universal Health Care and Guaranteed Green Housing, then the cost would still exceed $50 trillion for the first decade, because of the other components.

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