Let's Talk About the Preposterously Misnamed "Inflation Reduction Act"

[lustylad]

Oh dear... wasn't WTF just whining about "giving away more stimulus money to counter the inflation of prior stimulus money"?

Why yes, he was! Now I remember!

It was in connection with Florida Gov. DeSantis' decision to take a minuscule $35 million in "use it or lose it" fed dollars and dispense it to Florida's poorest families, while expressing hope this might help in a small way to cushion them against the rip-roaring ravages of Joe Biden's soaring inflation!

Originally Posted by WTF

How logical is it for the government to continually supplement inflated dollars it originally inflated? ...you think it brilliant to continually give away money to counteract the negative effect of inflation your previous giveaway induced?

Originally Posted by WTF

DeSantis... was giving away free money to offset the prior giveaway of free money.

Originally Posted by WTF

DeSantis gave away more stimulus money to counter the inflation of prior stimulus money!

The giveaway to OFFSET inflation....was idiotic.

By golly, it sure seems WTF got himself all worked up and indignant over this!

Of course, WTF completely ignored the fact that DeSantis as a Governor had zero authority or control over the profligate spending decisions made by dim-retards in Washington DC that ignited the inflation we're currently suffering.

And he rejected all criticisms of other (dim-retard) Governors - including California Gov. Gruesome who shelled out nearly 250 times as much to bribe voters in his state on the eve of his recall election!

But now we are looking at a much more fitting example of what WTF, in his flawed, selectively partisan & simple-minded way, seemed to be railing against... it's the latest dim-retard effort to resuscitate Joe Biden's failed BBB agenda by rolling out a new plan to spend $433 billion in additional stimulus money under the absurd banner of REDUCING INFLATION!

One would think this news would be tailor-made for WTF to start a new thread and run with it to make his point. I've been waiting & waiting for him to do so. Except he can't - it's a dim-retard bill and his DNC handlers will not tolerate a peep of criticism! They're saying spending more money on top of our previously mis-spent inflationary outlays will REDUCE inflation!

Where's WTF when it's time to get TRULY indignant about something he was feigning indignation about last week?

Can you say H-Y-P-O-C-R-I-T-E???

[lustylad]

Gerry Baker at the WSJ is quite indignant. Where is WTF? Out selling used cars?


‘Inflation Reduction Act’ Is an Insult to Used-Car Salesmen

Democrats hide a power grab behind a purported solution to rising prices—a problem they themselves caused.

By Gerard Baker
Aug. 1, 2022 12:00 pm ET


Just as some claims made in business are so self-evidently fictitious that even the most shameless of hucksters will recoil from articulating them, so some propositions advanced in politics are so dishonest that even the most mendacious politician will avoid association with them.

Then there’s the Inflation Reduction Act of 2022.

If you’ve ever been convinced by a used-car salesman that the 20-year-old rusting hulk out back with the dodgy chassis and the blue smoke pouring out of the exhaust is a “reliable pre-owned bargain,” you’re going to love the Inflation Reduction Act.

This, you will know, is the new name that has been conferred by Senate Democrats and the White House on the remnants of the old Build Back Better bill, the vastly ambitious tax-and-spending measure that was nearly foisted on an unsuspecting American public last year in the middle of a pandemic.

Like that lemon sitting at the back of the dealer’s lot, it’s been given a little touch-up, a fresh coat of paint, a reduced price tag and a bright new description. The master plan that was going to save the planet from extinction a year ago has been repurposed as a fully functional inflation-fighting weapon, laser-focused on reducing price pressures in the American economy.

I’m being a little unfair to used-car dealers. Surely not even the most opportunistic of charlatans would take his customer for that kind of a fool.

Start with the premise for the principal claim in the bill—namely that the package of $739 billion in tax increases and reduced outlays and a little $433 billion in new spending will produce a “historic” $300-plus billion reduction in the federal deficit over 10 years “to fight inflation.”

True, deficit reduction should, other things being equal, reduce aggregate demand and inflation. We’ll come to the economic wisdom and plausibility of the specific measures shortly, but it is worth noting that, in the very first sentence of their summary, the Democrats hand up a self-indictment of almost everything they’ve been doing in the 18 months since the party took the Senate and the White House.

If a bill that reduces the deficit by $300 billion over 10 years represents “inflation reduction,” what are we to make of a law Congress passed last year that increased the deficit by an estimated $1.7 trillion in less than two years?

If we are in the business of renaming legislative measures with a bill that is going to reduce inflation through deficit reduction, can we now all agree to call the American Rescue Plan of 2021—which added six times as much to the deficit in one-fifth of the time—the Inflation Acceleration Act?

Then take a look at what the Democrats’ new bill actually achieves in deficit reduction.

Because the spending provisions kick in more quickly than the revenue-raising provisions, the bill would actually increase the deficit in its first few years. According to the Penn Wharton Budget Model, it would begin to reduce the deficit only in 2027.

So the Inflation Reduction Act—sold to Americans on the basis that it will reduce the surging inflation the Democrats themselves helped unleash—won’t even have any downward effect on the deficit for five years. I’m skeptical about the average lawmaker’s ability to predict the inflation rate in five years, but if we have to wait until 2027 to get on top of the current cost-of-living crisis, we are in trouble.

As for those tax increases that kick in straightaway, especially the minimum corporate tax rate, not only are they outweighed by the spending increases, but they make no sense at all for an economy that is clearly contracting at an alarming pace.

Democrats claim that some measures, such as enabling Medicare to negotiate drug prices, will tamp down inflation. But that’s largely speculative, and the independent Penn Wharton analysis sees no overall impact on inflation.

Of course it doesn’t. That’s not what the bill was ever intended to do.

Tear off the absurd Inflation Reduction Act label, and behind it, you will see—illuminated by the excited glow of media coverage of the Democrats’ premature victory laps—exactly what it is: another large plank in the Democratic plan to “re-engineer“ the U.S. economy, with another hefty expansion of government, disappointingly enabled in part, by the way, by congressional Republicans, who cleared a path for it by helping pass another bill, subsidizing semiconductor producers.

The left’s increasingly shrill claims of a climate “emergency” have always been a thin veneer to cover their ambitions to take over large swaths of the American economy.

It all amounts to a breathtaking piece of policy-making chutzpah worthy of the most unscrupulous salesman’s patter: Having created the inflationary mess in the first place, Democrats now aim to con the country into believing that they’re cleaning it up, even as they steal a further march in their plan to remake the country.

If anyone thinks that’s what America voted for two years ago, I have a used car to sell them.

https://www.wsj.com/articles/inflati...r-11659363843?

[WTF]

I'm no more for this than I was the logic of DeSantis saying he was offsetting inflation by giving away MORE money.

I pointed out the slippery slope it can lead...everyone wanting to give free money to their cause.

Now hopefully you, Tiny and Bernie can see the error of your ways.

Wait, wait you, Tiny and Bernie were for the give away you support!

I was pointing out the hypocrisy that was surly soon to come...and sure enough, here it is! I didn't realize it would come so quick from you.

So you and Bernie oh and Tiny too are for the DeSantis giveaway.

Have you read this particular bill? Are you already against it before even reading it?

Are you against the CHIPS giveaway like Bernie....oh wait, you say it is nuanced. Have you figured out the nuances yet? Surely you've read the bill by now!

Please try and reply in the spirit of the forum rules with the slights you continue to evoke. I'd hate to see you pointed again.

[bb1961]

The topic of the thread is the misnamed 'inflation reduction act".
What do you have to disprove this...yeah that's right. NOTHING!!
And you talk about thread hijacking.

[dilbert firestorm]

what should we call this act? inflation increase act?

[WTF]

Originally Posted by bb1961

The topic of the thread is the misnamed 'inflation reduction act".
What do you have to disprove this...yeah that's right. NOTHING!!
And you talk about thread hijacking.

Whoa Cowboy....I'm not for this bs bill.

I don't have to disprove a thing.

I think it stupid.

[nevergaveitathought]

the dims wish to hire over 80,000 irs agents in this bill

and they claim they are only raising taxes on the rich and on corporations

the dims say that the "investment" in the 80 thousand irs agents will make them money, that there will be a margin over the cost of these agents due to stricter enforcement

they don't need all of the addl 80,000 for large corporations

so this "stricter enforcement", a large part of which will increase cost to small business, and not just in the few tax dollars picked up here or there, but also in the regulatory costs of dealing with intrusions by these agents

isnt that a tax increase, if not directly of taxes, at least indirectly of taxes on the middle class?


increased costs, found in tax increases and regulatory costs, of large corporations and small businesses, from this bill will be pushed onto the average american

which the dims dont talk about

all of that comes at a time the fed is trying to fight inflation, and how do they do that?

by sticking a stake in the heart of the consumer and in job losses

so who exactly will bear the cost of this bill and the cost of inflation fighting? yeah....you

[lustylad]

Originally Posted by nevergaveitathought

the dims wish to hire over 80,000 irs agents in this bill

and they claim they are only raising taxes on the rich and on corporations

the dims say that the "investment" in the 80 thousand irs agents will make them money, that there will be a margin over the cost of these agents due to stricter enforcement

they don't need all of the addl 80,000 for large corporations

so this "stricter enforcement", a large part of which will increase cost to small business, and not just in the few tax dollars picked up here or there, but also in the regulatory costs of dealing with intrusions by these agents

isnt that a tax increase, if not directly of taxes, at least indirectly of taxes on the middle class?

Yes.

To put it in perspective:

In 2019, the IRS employed 74,454 people and had an annual budget of $11.3 billion.

If I was IRS director and had a good overview of the staffing situation, it's possible I might conclude the agency could use a few more agents.... but a fucking DOUBLING in its staff? No way! These people are out of control!

[Tiny]

Hot off the presses from the good people at the Tax Foundation. I believe their comments about inflation are consistent with the Penn Wharton Budget Model. Here's what they're predicting, as a result of this bill if enacted.

Change in GDP: -0.1%
Change in Capital Stock: -0.3%
Change in Wage Rate: -0.1%
Loss of full time equivalent jobs: 30,000
Change in inflation: Who the hell knows. It may worsen it.

Details & Analysis of the Senate Inflation Reduction Act Tax Provisions

Last-week’s Democrat-sponsored Inflation Reduction Act (IRA), successor to the House-passed Build Back Better Act of late 2021, has been touted by President Biden to, among other things, help reduce the country’s crippling inflation. Using the Tax Foundation’s General Equilibrium Model, we estimate that the Inflation Reduction Act would reduce long-run economic output by about 0.1 percent and eliminate about 30,000 full-time equivalent jobs in the United States. It would also reduce average after-tax incomes for taxpayers across every income quintile over the long run.

By reducing long-run economic growth, this bill may actually worsen inflation by constraining the productive capacity of the economy.

Our analysis contains estimates of the budgetary, economic, and distributional impacts of the Inflation Reduction Act as specified in bill text provided on July 27.

Using the General Equilibrium Model, we estimate that the tax provisions, IRS enforcement, and drug pricing provisions in the bill would increase federal revenues by about $656 billion over the budget window, before accounting for $352 billion in expanded tax credits for individuals and businesses, resulting in a net revenue increase of about $304 billion from 2022 to 2031.

Excluding the anticipated revenue from increased tax compliance and the drug pricing provisions, the bill would lose about $126 billion in revenue over the budget window.

https://taxfoundation.org/inflation-reduction-act/

And here's a link to the Penn Wharton Budget Model's work on this:

https://budgetmodel.wharton.upenn.ed...nary-estimates

About the proposed bill, they conclude: "The impact on inflation is statistically indistinguishable from zero."

[WTF]

Originally Posted by nevergaveitathought

the dims wish to hire over 80,000 irs agents in this bill

and they claim they are only raising taxes on the rich and on corporations

the dims say that the "investment" in the 80 thousand irs agents will make them money, that there will be a margin over the cost of these agents due to stricter enforcement

they don't need all of the addl 80,000 for large corporations

so this "stricter enforcement", a large part of which will increase cost to small business, and not just in the few tax dollars picked up here or there, but also in the regulatory costs of dealing with intrusions by these agents

isnt that a tax increase, if not directly of taxes, at least indirectly of taxes on the middle class?


increased costs, found in tax increases and regulatory costs, of large corporations and small businesses, from this bill will be pushed onto the average american

which the dims dont talk about

all of that comes at a time the fed is trying to fight inflation, and how do they do that?

A tax increase actually would counter inflation....not the best choice but you are incorrect if you are claiming tax hikes do not counter inflation

[lustylad]

Originally Posted by WTF

Whoa Cowboy....I'm not for this bs bill.

I don't have to disprove a thing.

Can you disprove that you are being a partisan hypocrite by mentioning DeSantis a dozen times - while saying nothing about this ridiculous "Inflation Reduction Act", which is a much apter example of the "giving away more stimulus money to counter the inflation of prior stimulus money" that supposedly raises your hackles?

Can you disprove that DeSantis as a state Governor directing $35 million of "use it or lose it" fed dollars instead of letting the funds expire, and saying he was doing it to help his poorest residents cope with Joe Biden's ruinous inflation, which DeSantis as a Governor in charge of a responsible state budget with a massive surplus had zero influence over, is not in any way comparable to the spectacle of watching the reckless, irresponsible dim-retards in DC roll out a new federal spending bill pouring hundreds of billions in fresh fuel onto the raging fires of runaway inflation while they laughably and disingenuously tell voters this will "reduce inflation"?

DeSantis merely hoped that handing out $450/month to poor families would help them COPE with Joe Biden's ruinous inflation. He never made the ludicrous claim that it would reduce it.

[Tiny]

Originally Posted by WTF

A tax increase actually would counter inflation....not the best choice but you are incorrect if you are claiming tax hikes do not counter inflation

Did you catch the WSJ article I linked to in LL's tax thread? The writer, who was an economics professor in a major Texas university, said the Reagan tax cuts helped reduce inflation. Yes, that's counterintuitive, but he knows a lot more about that than we do.

Agreed, in general a tax increase should counter inflation. But if it's in the form of a minimum tax on corporations and increased IRS enforcement efforts on the wealthiest Americans, it's not going to do much. That's what this bill would do.

To lower consumption, and have a favorable effect on inflation, you need to increase taxes on the people who do most of the consuming in the USA, that is the bottom 99%. And, as LL and Texas Contrarian pointed out recently in their seminal posts in the other thread, that's just not going to happen.

[bb1961]

With WTF logic why not just raise taxes 100% and the inflation problems would be solved.
Not only are they going to raise tax they are going to increase spending in this inflationary economy...they are going to spend their way to prosperity!!

[nevergaveitathought]

reading that tiny, there seems to be a ying and a yang in the dim bill

in considering the name of the bill "inflation reduction act"

i guess the way in which the bill reduces inflation is to reduce income, lets call that the ying

and the yang, the thing that counters the ying? what is the yang but reduced productive capacity the bill will induce?

so yes, the bill fights inflation on one hand and then it doesnt fight inflation on the other hand

and the reduced productive capacity, all part of the green agenda?

you know how they practice to deceive

[Tiny]

Originally Posted by nevergaveitathought

reading that tiny, there seems to be a ying and a yang in the dim bill

in considering the name of the bill "inflation reduction act"

i guess the way in which the bill reduces inflation is to reduce income, lets call that the ying

and the yang, the thing that counters the ying? what is the yang but reduced productive capacity the bill will induce?

so yes, the bill fights inflation on one hand and then it doesnt fight inflation on the other hand

and the reduced productive capacity, all part of the green agenda?

you know how they practice to deceive

Nevergaveitathought, Maybe I should go ahead and link to the post in LL's thread with the WSJ article I was describing to WTF,

https://eccie.net/showpost.php?p=106...&postcount=232

It describes what Reagan did, including cutting taxes, and how we managed to control inflation. I'm not sure I agree with 100% of it, but the writer is a whole lot smarter than I am.

And he's getting I believe at exactly what you're getting at. Taking money away from the people by taxing them more may theoretically be one way to help reduce inflation. But it's not necessarily good for the people or the economy.