The news media is saying that Joe Biden had a good week because off his legislative victory in reaching agreement for the Senate and the House to pass what the Democrats have labeled “The Inflation Reduction Act of 2022.” Don’t get your hopes up. This is a bait and switch legislation that does not, nor will it ever, live up to the false moniker it has been given. What it amounts to is spending $369 billion to stimulate the pet climate change, green energy agenda of the left, rewarding non-profits, state and local governments, and Indian tribal governments with government cash payments while increasing taxes on corporations and raising drug prices on Medicare to pay for it. Effect on Inflation? Zero. Zilch. Nada.
The Democrats claim the bill would reduce the deficit by some $300 billion, which would lower inflation. Think about this. At the time of this writing, the US federal deficit was nearly $1.6 TRILLION and the US national debt was $30.6 TRILLION. Applying intelligence and common sense, making a payment of $300 billion against a $31 Trillion debt is hardly going to reduce inflation of any kind, especially when raising taxes and Medicare drug prices to redistribute taxpayer funds to climate change cronies. This legislation only raises the misery index by cutting benefits to senior citizens and causing corporations to raise prices on goods and services to cover the tax increase. Meanwhile, the IRS will have its boot to every taxpayers’ throat. Oh, but this is the “Inflation Reduction Act of 2022.”
The influential Penn-Wharton Budget Model (PWBM) analysis indicates that the legislation will not even live up to the deficit reduction it advertises. The Penn-Wharton take on the bill is: “The Inflation Reduction Act would reduce non-interest cumulative deficits by $248 billion over the budget window with no impact on GDP in 2031. The impact on inflation is statistically indistinguishable from zero.” In fact, Penn-Wharton says the Act “would very slightly increase inflation until 2024” and that “These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation.” Penn-Wharton projects labor supply and capital distortions from rising tax rates.
The National Law Review writes that the Democrats are even trying to subvert the rules to pass the legislation, “Senate Democrats intend to vote on the Act through the budget reconciliation process, which would permit the legislation to pass with a bare majority vote in the Senate. If there is no Republican support for the Act, all 50 Democrats in the Senate would need to vote for the measure, and Vice President Kamala Harris would be required to cast the tiebreaking vote.” And because the bill has zero impact on inflation, there is no guarantee that the Senate Parliamentarian will allow certain provisions. This is how the bait and switch works with leftist politicians. As in Jeremiah 9:8, “Their tongue is an arrow shot out; It speaks deceit.”
Sources:
https://www.natlawreview.com/article/summary-inflation-reduction-act-2022
https://budgetmodel.wharton.upenn.edu/issues/2022/7/29/inflation-reduction-act-preliminary-estimates
