When you ask an American about the future risks facing their country, the answer you get will likely vary depending on political affiliation. Those who lean left (“liberals”) will likely mention climate change, while those who lean right (“conservatives”) will likely mention social spending / national debt. (According to a recent Gallup poll, peoples views also tend to align based on age; understandably older respondents care more about economic growth, while younger respondents favor environmental concerns):
According to Pew Research Center surveys conducted last year, 25 percent of self-identified Republicans said they considered global climate change to be “a major threat.” The only countries with such low levels of climate concern are Egypt, where 16 percent of respondents called climate change a major threat, and Pakistan, where 15 percent did.
By comparison, 65 percent of Democrats in the United States gave that answer, putting them in the same range as Brazilians (76 percent), Japanese (72 percent), Chileans (68 percent) or Italians and Spaniards (64 percent). If you combine Democrats and independents into one group, 52 percent called climate change a major threat, according to Pew. That’s the same broad range of concern as in Germany (56 percent), Canada and France (54 percent), Australia (52 percent) or Britain (48 percent).
Over all, between 40 percent and 45 percent of Americans in recent Pew polls have called climate change a major concern (with a similar share of independents giving that answer).
The Republican skepticism about climate change extends across the party, though it’s strongest among those who consider themselves part of the Tea Party. Ten percent of those aligned with the Tea Party called climate change a major threat, compared with 35 percent of Republicans who did not identify with the Tea Party.
According to those most concerned about climate change, continued inaction will lead to multiple catastrophes: coastal flooding, ecosystem / food-system disruption, air and water quality degradation, and an increase in extreme weather events to name a few. “How could we leave such a future to our children?”, they ask.
According to those most concerned about economic issues, continued fiscal irresponsibility will also lead to a plethora of adverse consequences: rising interest rates, [hyper]inflation, and ballooning national debt (never-mind that these two consequences are incompatible, as inflation erodes debt). The Government will be unable to pay for future public programs, contributing to the general “decline” of American. “Forget that ‘global warming’ conspiracy, how can we leave this future to our children?” they counter.
Both sides paint dire pictures that are entirely separate from one another. Both arguments appeal to “the children!!” to augment their political beliefs. So which argument holds more merit? Well lets look at the facts:
It’s been an extraordinary six weeks for climate scientists. Any lingering doubts about the immediacy of climate impacts on the lives of Americans are now permanently laid to rest, thanks to four extensive reports from thousands of scientists.
It began with a straight-talking, no-nonsense report called “What We Know” from the world’s largest general science organization (AAAS) earlier this spring that laid out in clear detail why the entire scientific community no longer has any doubts whatsoever about the nature and extent of the climate risk to our economy and communities.
Weeks later, the second and third of successive reports from different arms of the Intergovernmental Panel on Climate Change (IPCC) issued separate, detailed reports on the current science around climate change impacts in the world, and the potential costs to society and the economy right now if we don’t change our energy patterns.
And then this week, a report written by hundreds of American scientists culminated this six-week run of world-class, peer-reviewed science reports with the congressionally-mandated National Climate Assessment that laid climate impacts literally at the doorsteps and window panes of most Americans.
Climate change isn’t a computer model, a fuzzy prediction, a cute picture of polar bears on shrinking icebergs, or some far-off, distant threat that people who aren’t born yet will have to deal with. It’s here, now – and it’s disrupting our lives.
It’s affecting food prices through extended droughts and flooding basements in extreme rainfall events – the types of dry and wet extremes that scientists have been telling us for years would be part of a changing world. Now we can see these things with our own eyes, out our own windows.
The scientific consensus is that climate change is real, it is man made, and the adverse effects–while more pronounced in the future–are already beginning to occur.
There are two sides to national debt, revenues (taxes) and expenditures (government spending). Whenever expenditures exceed revenues, the government must either take money from its surplus (which we do not currently have), or issue new debt to finance its spending. Every dollar of debt has an interest rate attached to it, the government’s borrowing cost.
With large annual deficits, an increase in interest rates on bonds would indeed cause a great increase in government debt. However, the fiscal responsibility doomsday theorists have been proved wrong:
In what sense did economics work well? Economists who took their own textbooks seriously quickly diagnosed the nature of our economic malaise: We were suffering from inadequate demand. The financial crisis and the housing bust created an environment in which everyone was trying to spend less, but my spending is your income and your spending is my income, so when everyone tries to cut spending at the same time the result is an overall decline in incomes and a depressed economy. And we know (or should know) that depressed economies behave quite differently from economies that are at or near full employment.
For example, many seemingly knowledgeable people — bankers, business leaders, public officials — warned that budget deficits would lead to soaring interest rates and inflation. But economists knew that such warnings, which might have made sense under normal conditions, were way off base under the conditions we actually faced. Sure enough, interest and inflation rates stayed low.
And the diagnosis of our troubles as stemming from inadequate demand had clear policy implications: as long as lack of demand was the problem, we would be living in a world in which the usual rules didn’t apply. In particular, this was no time to worry about budget deficits and cut spending, which would only deepen the depression…We needed more government spending, not less, to fill the hole left by inadequate private demand…Since 2010, we’ve seen a sharp decline in discretionary spendingand an unprecedented decline in budget deficits, and the result has been anemic growth and long-term unemployment on a scale not seen since the 1930s.
To be sure, eventually interest rates will increase and deflationary pressures will subside–the economy will emerge from it’s “liquidity trap“. Here’s the good news, emergence from the liquidity trap corresponds with near full employment (not zero unemployment, but the “natural” rate of unemployment). Interest rates and inflation will not rise until the economy is in much better shape, meaning increased interest costs will be at least partially offset by a decline in “automatic stabilizer” spending (spending on poverty reduction programs–SNAP, unemployment insurance, etc.–which increase automatically during economic downturns).
Factoring for automatic stabilizers, Krugman’s analysis shows that we are barely running a primary deficit at all. True we should not leave past debt for future generations, but we should also not under-invest in current generations / pursue wrong-minded economic policies because of past policy follies. When you invoke the specter of “the children!!, consider current generations of children and young adults who have been seen their futures compromised / delayed due to political failures.
On one hand, the risks associated with inaction on climate change are real and rising. On the other hand, the risks associated with high levels of national debt have proven overblown and are partially self-correcting. That is not to say there are long-term drivers of debt which must be addressed in order to reign in long term fiscal deficits. But the U.S. Government has the benefit of being a reserve currency and a “safe haven” for investment–both factors pushing down the interest rate our government pays to borrow money. We can pay down our debts responsibly and counter-cyclically, when the economy recovers.
The common perpetrator in both these future risks–national debt and environmental degradation–are corporate interests and the politicians that enable them. Consider these historic tables of government tax revenues by source (pg. 34-35). Personal income tax contributions have been fairy stable, while corporate income taxes have decreases drastically over the past decades.
The greatest threat to our Nation’s future is not public / social spending, it is our continued inability to pursue comprehensive tax reform (including carbon taxation).
Corporate profits are at an all time high; perhaps big corporations do not need a healthy domestic economy to prosper in a globalized world. But people, as ever, still need to have their basic needs met. It is up to our leaders to ensure these corporations, which benefit from every element of public spending (infrastructure, technological innovation via public R & D, a skilled workforce), pay their fare share towards financing necessary government expenses.
And it is up to us to find and elect these leaders, in spite of powerful forces acting against these reforms.
Please turn out and vote in the 2014 midterm elections. Regardless of your political affiliation, demand bipartisan Congressmen with a history of not being beholden to corporate interests. Despite pervasive cynicism, we the people still hold the power in this country.
Won’t somebody please think of the children!