When Chuck Schumer and Joe Manchin decided to call their tax and spending bill the Inflation Reduction Act of 2022, they must have had a laugh. Of course, the joke is on the American taxpayers, who will be footing the bill for Chuck and Joe’s spending bonanza. At the Ron Paul Institute, former congressman and presidential candidate, Dr. Ron Paul, calls the Inflation Reduction Act a competitor for “Most Inappropriately Named Bill.” He writes (abridged):
The Affordable Care Act, No Child Left Behind, and the USA PATRIOT Act received new competition for the title of Most Inappropriately Named Bill when Senate Democrats unveiled the Inflation Reduction Act. This bill will not only increase inflation, it will also increase government spending and taxes.
Inflation is the act of money creation by the Federal Reserve. High prices are one adverse effect of inflation, along with bubbles and the bursting of bubbles. One reason the Federal Reserve increases the money supply is to keep interest rates low, thus enabling the federal government to run large deficits without incurring unmanageable interest payments.
The so-called Inflation Reduction Act increases government spending. For example, the bill authorizes spending hundreds of billions of dollars on energy and fighting climate change. Much of this is subsidies for renewable energy — in other words green corporate welfare. Government programs subsidizing certain industries take resources out of the hands of investors and entrepreneurs, who allocate resources in accordance with the wants and needs of consumers, and give the resources to the government, where resources are allocated according to the agendas of politicians and bureaucrats. When government takes resources out of the market, it also disrupts the price system through which entrepreneurs, investors, workers, and consumers discover the true value of goods and services. Thus, “green energy” programs will lead to increased cronyism and waste.
The bill also extends the “temporary” increase in Obamacare subsidies passed as part of covid relief. This will further increase health care prices. Increasing prices is a strange way to eliminate price inflation. The only way to decrease health care costs without diminishing health care quality is by putting patients back in charge of the health care dollar.
By Ron Paul, MD, Ron Paul Institute
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