analyticsbox | Aug 03, 2022
George Orwell would be proud!
Are you kidding me? If we call a spade a heart, does that make it a heart? Of course not.
This is an insult to our intelligence, the politicians must think we trust them - they are wrong. Did calling the inflation problem transitory make it transitory? No. Is this Inflation Reduction Act going to reduce this ‘transitory’ inflation? No again.
The Inflation Reduction Act is inflationary. Why? Because the first thing it does is increase spending and deficits and later some tax ‘increases’. The so called tax increases are ephemeral, and doubtful, but they also will impact inflation - up. Adding corporate taxes at a minimum 15% level is costing employees and consumers, the corporation is just the conduit. Passing along increased prices is reducing inflation? Inflation is the most cruel tax of all hurting most, those that can least afford it.
And this approach to Corporate taxes is doing just the opposite of what we should be doing, it will discourage investment when we just got the incentives to invest and expand productive resources right in 2017. Where has common sense gone? It has gone the way of politicians trying to bribe the public with their own money.
This PBS (political bull s–t) is on par with the ‘Affordable Care Act’ (aka Obamacare) which uses taxpayer money to subsidize a small sector of the population, while increasing the insurance cost on over 80% of the population by double or more. Affordable? Not so affordable to me. And this bill adds 60 billion more in subsidies to ACA to ‘reduce inflation’. Maybe they missed the point that running up the deficit by another 60B is itself inflationary to all, while helping (with our money) a small segment of the population.
More subsidies for EV’s. Great idea, except for the fact that with today’s technology, they do very little to improve the carbon footprint when you look at the life cycle from production of the battery through the life of the vehicle. And if we are really successful, where is the electricity going to come from to charge all these EV’s. Wind? Sun? I think not. And why the government thinks they should use our tax money to subsidize the wealthy who can afford them, is beyond me.
And 300B for green energy - it will have almost no effect on the world carbon footprint. We only generate 11% of the world's carbon now, and while we do backflips for minimal benefit, China and India are adding coal fired generating plants weekly. And we discourage oil and gas here where we have plenty, while we buy from foreign countries and burn oil to ship it here. Is burning their oil somehow producing less carbon than burning our own? I am all for green when it works, but we are destroying ourselves for no good reason except to placate a few who delude themselves into thinking we are doing a good thing (while they jet around in their private planes - hypocrites? For sure).
Sounds good. Feels bad. And curtailing oil/gas production is disproportionately driving up energy costs, which ripple through our entire economy, adding to our inflation and hurting our economy badly.
There is so much wrong with this bill we should rename it ‘The Increased Deficit and Inflation Act of 2022’. That would be more fitting. For further analysis see this article by Dan Mitchell.
BOTTOM LINE
I know Congress feels compelled to always do something about our problems. I wish they would contain themselves, doing nothing would be a big improvement.
LEARN ECONOMICS, THEN VOTE SMART