The Green New Deal would spike inflation to 10% per year

Consider a GND [Green New Deal] to be financed through a fully anticipated inflation, constituting a tax on non-interest-bearing money. Assume also that all money except currency earns interest. Currency in circulation is about $1.7 trillion.129 If we assume, conservatively, that a GND financed with money creation would result in an anticipated inflation of 10 percent per year, then the implicit tax on currency, yielding a transfer of real resources to the government, would be about $170 billion per year. Note that this tax is less than the cost to the economy inflicted by the inflation, as individuals and businesses take actions to protect themselves from this tax. This is another dimension of the excess burden attendant upon governmental acquisition of real resources; estimates of this effect vary, but one survey of the literature finds: A number of empirical studies have sought to measure the interactions between inflation and the nominal nature of the U.S. tax system. Most find the costs are large. Authors James Bullard and Steven Russell, for example, suggest approximately a 1 percent output loss for each 1 percent increase in inflation above price stability.130 This inflationary version of the excess burden created by the government acquisition of resources would take the form of such adverse consequences as a degradation of the currency as a store of value, adverse behavioral responses by holders of currency, and the like. The use of money creation to service debt incurred to finance the GND also is deeply dubious, as any such approach would be based on an assumption that purchasers of government debt instruments will deliver real resources to the government with no expectation of receiving repayment in an equivalent amount of real resources, plus interest. It cannot be the case that lenders to the government are so myopic.