Those opposed to such global action will of course raise the question of how we pay for it, and will insist that the United States has to focus on its own population before looking to the needs of others. Yet a new report by the Transnational Institute shows that there are plenty of ways to raise the global finance needed. Paying for the Pandemic and a Just Transition pulls together ten progressive proposals that could raise $9.4 trillion a year — enough to pay for the pandemic, the Sustainable Development Goals, a just climate transition, and reparations for slavery in the United States. All the proposals are designed to make the elites who have most enriched themselves in past decades pay for the crises we collectively face.
The ten proposals are based on pre-existing policy propositions by international organizations, think tanks, academics, and social movements. They include taxes on billionaires and corporations, shutting down tax havens, removing fossil-fuel subsidies, issuing Special Drawing Rights (a unique IMF currency), and a redirection of 10 percent of global military spending.
These are proposals that can work globally and support low-income countries that do not have the same capacity as the United States to spend their way out of the crisis. Some of the proposals are easier to implement and even on the conservative end of ambition, while others are more ambitious and only in their embryonic stages of development. But they are all achievable if there is the political will, and even more so if one of the world’s most powerful nations, the United States, puts its political weight behind them.
Covid-19 has already shifted the Overton window of what is considered economically feasible. Actions that were previously deemed extreme such as taking over private hospitals (as happened in Spain) or providing basic income support (as happened in the United States) were enacted quickly in the face of the pandemic. They have shown that policy options that go against the political grain and against corporate interests can be enacted if the issue is considered urgent, necessary, and demanded by the public.
And there is evidence this logic is also influencing the issue of financing. Take the proposal on diverting military spending for example. Some might dismiss it as utopian, but South Korea has announced that it will trim next year’s defense budget by 2 percent ($738 million) and Thailand by 8 percent ($557 million), with the money going instead to a disaster-relief fund and stimulus package respectively. There is every reason why U.S. progressives should demand a similar or bigger reduction in the bloated U.S. military budget.
There is also international precedent on using new taxes to build back better. Indonesia, for example, is planning to implement a new sales tax on digital goods and services to help pay for the pandemic, targeting those who have most profited from the crisis. And political support is building in both the G-24 and the EU for a digital services tax on the tech titans who have made billions from the lockdowns.
This is not to underestimate the resistance these progressive proposals will face. The fossil fuel industry, for example, has used Covid-19 to derail the EU Green Deal, lobbying to win concessions for climate-damaging energy schemes, gain access to bailout funds, and weaken environmental standards. And, the IMF, despite more progressive language, has been pushing countries facing new debt crises into packages that promote austerity.