The Inflation Reduction Act is another Biden charade
It should be renamed the infaltion conflation act.
President Biden thinks pouring more money into the economy will reduce inflation. He also thinks he is likely to become President, or something like that.
The Inflation Reduction Act is likely to pass both houses of Congress. Here is what it is reported to contain.
The 15% corporate minimum tax will increase inflation. Corporations don’t pay taxes, they collect them. All cost increases (including taxes) are passed on their customers. Higher corporate taxes are a tax on the poorest in society who comprise the largest segment of purchasers of most goods.
Prescription Drug price reform sounds promising. It will be interesting to see how the federal government will control drug prices without curtailing the supply of needed drugs. Drug producers will have something to say about that and history has shown they are adept at keeping their prices high.
Expanded IRSS enforcement will increase government spending. IRS tax enforcement is a plan to add thousands of bureaucrats that will double the size of the IRS workforce. If successful it will add to taxes. Taxes are a cost and higher taxes = higher inflation.
Affordable Care Act (ACA) subsidy extension is higher government spending. It is too much government spending that created the inflationary spiral and more spending won’t cure it. For some people, the subsidy extension comprises a benefit and will be welcome relief for those people.
Energy security and climate change investments are a distraction. More spending, but no evidence it will increase the supply of fossil fuels which underlies much of the inflationary cost pressures. Subsidizing EV’s won’t lower food prices, rent or the costs of gasoline and will have no impact on the rise in prices of grains.
The soaring inflation rate was caused by excessive government spending of borrowed money and policies that restricted or discouraged oil & gas investments. The result was inevitable - more money chasing the same goods causes prices to rise, and a supply-demand imbalance in energy causes prices to rise. Surprise - prices are rising!
The world has a serious energy shortage today and it is getting worse. Bandaid solutions like depleting strategic petroleum reserves mask the problem since they simply squander a finite resource and do not encourage ongoing growth in supplies. The relationship between oil prices and inflation is inarguable.
Unless and until the world encourages growth in the supply of oil & gas inflation will persist and consumer prices will remain high. Rates of inflation may ameliorate if the hydrocarbon prices level off but the pressure from workers for higher wages will take over since wage gains have been less than half the rate of inflation and people still need to put food on the table. Home prices have begun to soften but rental rates are rising and mortgage rates will increase the monthly payments for those with adjustable rate mortgages or those who renew at higher rates.
The real question is how much higher will prices of oil and gas go if there is no increase in supply. The U.K and Europe give us some insight. Natural gas prices have reached levels equivalent to $300 a barrel oil in those jurisdictions, electricity costs have quadruples and winter is approaching. Desperate governments are turning to coal, tacitly admitting their experiments with “renewables” have failed.
Biden’s attempts to put lipstick on a pig just make him look out of touch. Notice that Justin Trudeau is silent, running away to Costa Rica rather than leading Canada at this critical time. I don’t suggest he isn’t entitled to a vacation, I just wish he would make it permanent.
Depressing outlook to be honest.
Most of these measures will NOT be undone by future administrations.
The utter state of this admin - ".....focused on putting three meals on the........table,......." You think he's reading this from a script? PATHETIC! "Repeat the line" ,"End of quote", "End of message".....
81M votes - my arse!
I suspect the new 87,000 IRS agents will go after GOP citizens.