Economists did everyone a disservice by putting so much weight on carbon pricing. It turns out that a very large part of what we need to do is just stop burning coal. So it’s not like we need a whole lot of complicated incentives to induce people to move on many margins.
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I’ve been proposing a three-way division of progressive proposals. First is investment — a lot of the Green New Deal stuff is investment. On that stuff, don’t worry about paying for it. Debt as an issue is vastly overstated, and a lot of these things pay for themselves. Go ahead and just deficit finance it.
There’s a second range of stuff — like universal pre-K or some expansion in health benefits short of Medicare-for-all — which probably should be paid for. But, because they’re fairly modest they can be paid for with fairly narrow taxes on the wealthy.
Then, there’s the really big stuff like conversion to a government-provided health care system which is too big to deal with in those ways.
On automation:
We keep on hearing about how radical and impressive new technology is, but output per worker hour is growing very slowly. And automation is just a kind of mechanization that allows you to do more stuff with fewer workers. So I think what is actually happening is the kinds of technological change we’re seeing now are ones that are flashy and very visible to people like you and me, but the basic way we live our lives and do business haven’t changed all that much.
From the transcript:
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On automation: