230 Economists Warn the US Government’s Proposed Inflation Reduction Act Will Fuel Inflation

Last week, Democrats introduced a climate change and health care bill called the “Inflation Control Act,” and much debate has surrounded the name of the proposed public policy. After the bill was revealed, 230 economists sent a letter to the country’s House and Senate leaders warning that the proposed policy would actually promote inflation. The letter emphasizes the urgent need to curb inflationary pressures in the United States, but further notes that “the ‘Inflation Control Act of 2022’ is a misleading label attached to a bill that is likely to have the exact opposite effect.”

230 economists tell House and Senate leaders that it is unwise to propose legislation on climate change and health care as the United States faces a “dangerous crossroads”

Inflation is high for 2022, and the Federal Reserve is trying to contain the problem by raising the Federal Funds rate. Gross domestic product (GDP) growth has been negative for two consecutive quarters, and there is much debate as to whether the U.S. is in a recession. On Friday, there was some positive news as the latest U.S. jobs report showed 528,000 jobs were added in July and the unemployment rate fell to pre-pandemic levels.

Amid the war between Ukraine and Russia, tensions between China and Taiwan, and a bleak global economy, the US Democratic Party has introduced new legislation to address climate change and healthcare called the Inflation Reduction Act new legislation to address them. Democrats claim the bill would “make a historic down payment on deficit reduction to fight inflation.”The $73.9 billion Inflation Control Act package recently got the go-ahead from US politicians Joe Manchin and Chuck Schumer. Democratic Senator Kyrsten Sinema of Arizona was the last to show support for the proposed climate change and health care bill

The bill’s sponsor, a politician, also said the policy would “invest in domestic energy production and manufacturing and reduce carbon emissions by 2030 by reduce them by roughly 40 percent.” The legislation, which will be voted on Saturday, is labeled by many as inaccurate and misleading. In fact, 230 economistswrote to Chuck Schumer, Mitch McConnell, Nancy Pelosi, and Kevin McCarthyand told them that the bill would cause inflation.

“At a time when the economy is already facing supply and demand imbalances, residual effects of the stimulus, labor shortages, and supply chain disruptions, this bill would exacerbate, rather than alleviate, many of these problems,” the letter said. The Economist’s letter to House and Senate leaders adds.

In particular, the proposed $433 billion in government spending would create immediate inflationary pressure by boosting demand, while supply-side tax increases would curb supply by discouraging investment that would drain resources needed by the private sector.

r/Economy Redditors on the Subreddit openly ridicule the analysis of global warming advocates who claim that inflation-control laws will help Americans save money

Of course, Democrats, left-leaning media publications, and non-profit think tanks claim that inflation-control laws will curb inflation and lead to savings. A Yahoo Finance articlewritten by Akiko Fujita attempts to prove that the bill will help Americans save money, citing a new analysispublished by the nonprofit Rewiring America.

501(c)(3) Rewiring America is a global warming advocacy group run by Arabella Advisors. Washington, D.C.-based for-profit consulting firm Arabella manages four funds: the Sixteen Thirty Fund, the New Venture Fund, the Hopewell Fund, and the Windward Fund. Arabella itself was founded by Eric Kessler, a former Clinton administration appointee.

Analysis shows that the Inflation Control Act would save the average family $1800, but subreddit r/economy A significant majority of Redditors disagreewith Rewiring America’s claims. One person cited Rewiring America’s modern housing siting requirements and emphasized“How the f*** can a lowincome household afford these.”The person who posted the article on r/economyreplied to the person that it was “typical government stupidity. “The Redditor added:

The whole green movement is a money grab for this generation.

Many other Redditorsdiscussed how politicians have a “higher than average” perspectiveon what is perceived as “low income” in the US.” A quick skim through the article reveals that the “$1,800” in savings that the average family “gets” is actually a tax break for low-income families to install more efficient electrical equipment. Is this a joke?” another Redditorasked

“Unfortunately, it’s not a joke to us.” The thread’s authorwrotein response to the joke question.

The Republican senator made it clearthat Joe Manchin and Chuck Schumer’s inflation control reform deal would not get support from the right-leaning party. Senator Lindsey Graham (R-PA) wrote Friday, “Senator Manchin, if you think you can get 60 votes to get a sweetheart deal you can’t do in reconciliation, you need to think long and hard about what you’re doing.”

What do you think about the letter sent by 230 economists to House and Senate leaders on the inflation control bill? Let us know your thoughts on this subject in the comments section below.

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