Why the Inflation Reduction Act Will Not Reduce Inflation
Stop the Presses! The “Inflation Reduction Act” won’t Reduce Inflation!
In a story that should surprise precisely no one, Yahoo/Finance reports that President Biden’s Inflation Reduction Act “will have no measurable impact on inflation.”
The story cites Oxford Economics economists who write, “Our preliminary analysis of the Inflation Reduction Act (IRA), a climate, tax, and health-focused bill, shows it will boost the level of GDP by about 0.2%-0.3% by the end of 2031 and, despite its name, will have no measurable impact on inflation.”
The Wharton School at the University of Pennsylvania was slightly more skeptical, finding that the Act would slightly increase inflation through 2024.
Some have been asking, in light of President Biden’s pronouncement that inflation was “zero” in July, why we would even need an inflation reduction act.
US households are spending an average of almost $500 a month more this year for the same goods and services they bought last year. If the Inflation Reduction Act actually reduced inflation, that extra $500 a month expense would go down, which is something nobody expects.
What the Inflation Reduction Act will accomplish, though, is the intrusion and harassment of the American people. The Congressional Budget Office reports that the IRS will collect billions of dollars from low- and middle-income households. It finds that audits of taxpayers making under $400,000 will squeeze some $20 billion dollars in additional revenue.
Let us leave you with this representation of the skyrocketing Producer Price Index. Producer prices are wholesale prices. They grow up to be consumer prices!