After months of negotiations, following the failure of Biden’s Build Back Better plan, the supposedly breakthrough legislation, that brought Sen. Joe Manchin (D-WV) back to the table with his fellow Democrats has been branded, as a measure to counter the budget deficit. It is called the Inflation Reduction Act of 2022.
It is actually more of a Trojan horse, rolled out for Americans to think that, Biden is actually doing something to help families, because inflation is the number one issue facing the U.S and is plunging the economy into a recession. It seems interesting at first glance, especially the way it’s been “spun” by the Democrats but it is full of deception, and ultimately gives a massive monetary foot-hold to the progressive left for climate change and energy programs. It is the best kind of lie – one that contains a small fiber of truth, with a one-third-of-a-trillion-dollar price tag.
The reality is the bill includes a massive expansion of government spending, a first indicator that it’s not going to be an inflation reducing piece of legislation. According to the nonpartisan Committee for a Responsible Budget, there is roughly $385 billion in spending on energy and climate change, with $100 billion of new spending for health care with Obamacare subsidies, expanded prescription drug and vaccine coverage.
On top of an already off-the-charts government budget, these new spending measures, will effectively operate to increase the collective demand in the economy, possibly increasing the supply of some goods and services, but will not likely increasing the needed supply. Instead, subsidies for green energy together with clean manufacturing tax credits, will shift supply sources without leading to any net increase. Just more tax and spend, with a creative title so Democrats can sound effective to the American populous. Don’t be fooled. The government cannot fix inflation by throwing money at it.
How much inflation will this legislation reduce? – None, and it may actually increase inflation in the near term. It does, however, give the special interest left, a vast amount to spend on their theory of climate change. What a joke.
According to the Penn Wharton Budget Model found on Friday, the bill will have no effect on inflation over the longer run. In the near term, they estimate it will produce a very small increase in inflation for the first few years, up to 0.05 percent points in 2024. After that it reportedly starts shrinking inflation a bit, however this is likely because the model incorrectly assumes the limited spending authorizations go away. Inflationary effects will continue if the new spending programs are extended. So, when was the last time Congress really cut spending, especially on new programs that are attached to special interest groups?
According to the Committee for a Responsible Budget estimates, the bill which is touted to “reduce inflation” by lowering the budget deficit, by increasing taxes and controlling some drug costs, may produce cost savings and an increases revenue by $470 billion. However, because it does not address the core problem, of too much money, chasing limited goods and services, none of that is likely to reduce inflation.
Reducing the budget deficit alone will not reduce inflation, but rather reducing the right kind of spending, or raising taxes in ways, that reduce the private sector’s spending is what is needed. This bill does neither.
Also, trying to argue that reducing the cost of prescription drugs should count as reducing inflation, the bills advocates are missing the mark. If you suppress the cost of a particular item, you simply shift inflation to another part of the economy. Effectively, lowering one price means household spending power drives up other prices. It’s simple supply and demand.
Targeting those most likely to spend money in the real economy, on goods and services, might make tax hikes helpful. That is not the case with the wealthy, who tend to save more of their income. Taxing them, while it increases revenue, does nothing to reduce inflation, but it does move the U.S. (especially struggling families) deeper into the recession. Additionally, taxing corporations on profits that were not ear-marked to be spent on real goods and services does nothing to reduce inflation. Rather, it may actually worsen inflation, if it incentivizes companies to plow revenue back into corporate coffers, through larger advertising budgets, increased research/ development, and payroll expansion.
As inflation continues to slowly rise and America sinks deeper into a recession, this legislation will not help those who are hit the hardest: the working poor, the middle class and small businesses. It spends above them and supports little that will trickle down to them – even over time. This Inflation Reduction Act legislation, will not reduce the basic prices of bread, milk, eggs and gasoline. To say that it will, is a lie, and a slap in the face of American tax-payers.
One Blogger put it this way-
“A trillion dollars rolls off Democrat lips like it's nothing. It's just too big to wrap their heads around. For perspective, take these numbers on a per capita basis, and it gets frightening.
$750 billion works out to about $2600 for every man, woman and child in America. Don't even think about calling these two Manchin bills "inflation relief money". It's nothing of the sort. Add that on top of the $6 trillion they've already thrown into the inflation fire.
They gave me $2600 in "Covid relief money" and added $25.00 to my monthly Social Security check. And then they added over $18,000 PER PERSON (now $20,000) to the national debt.
You want to know where inflation comes from? It comes from Democrats, a pox be upon them and all their unholy works. Where do we find these morons, and why do we leave them in office for decades?”
-BobDog19006, Breitbart Blogger
“A budget is telling your money where to go instead of wondering where it went.”
– Dave Ramsey