It should be called the 'Inflation Production Act'

Most of the provisions in the "Inflation Reduction Act" will give businesses the incentive or cause them to raise prices, not reduce them.

We are told that the energy credits will save people money.  But the solar, electric vehicle, and other energy credits will allow businesses to raise prices higher instead of reducing them.  When the government subsidizes anything, it allows companies to raise the prices on the subsidized product.

Biden signs the grotesquely misnamed legislation (YouTube screen grab).

Ford recently announced a $7,000 increase in the price of its electric pickup.

Ford is the latest company to increase prices on its electric vehicle. Rivian, GM and Tesla have all raised their EV prices as metal prices have soared, along with the cost of components like lithium, which are necessary to make batteries.

The basic model for the F-150 Lightning, called the Lightning Pro, will now start at $46,974, up nearly $7,000 from its $39,974 price tag earlier this year. The truck's most expensive model, the Platinum Extended Range, will cost $96,874, up by $6,000. [emphasis addeed]

In order to "save," people have to spend substantial amounts of money to get the energy credits, and well over half the people are already living paycheck to paycheck.

Around 64% of Americans are living paycheck to paycheck, according to a May 2022 LendingClub survey.

Over half of Americans can't afford a $1,000 emergency.

Some 56% of Americans are unable to cover an unexpected $1,000 bill with savings, according to a telephone survey of more than 1,000 adults conducted in early January by Bankrate.

But supposedly they are going to head out now to buy electric cars costing over $60,000 so they can reduce their cost of gas.  Is that a joke?  Do the politicians, journalists, and bureaucrats who recite those talking points have any common sense?

Consumer credit is rising at an extremely rapid rate because people can't keep up with their bills and purchases now, but we are supposed to believe they will run out and buy stuff to get tax credits and borrow more.  I wonder what could go wrong!

Even as borrowing costs surge, the NY Fed said credit card balances increased by $46 billion last quarter. Over the past year, credit card debt has jumped by $100 billion, or 13%, the biggest percentage increase in more than 20 years.

President Biden and others say the extension of the health subsidy will save 13 million people (4% of the population) $800 per year.  It won't save those people anything from what they are paying now; their special subsidy from the American Rescue Plan will just continue.

Health insurance companies will not have an incentive to lower or maintain their premiums when they have a captive audience: the taxpayers eating the costs.

The politicians who are saying this will lower costs mostly are the same ones that lied continuously that Obamacare would substantially lower costs.  Instead, they skyrocketed until Trump got rid of the individual mandates and gave people back the freedom of choice.  Then prices stabilized.

The tax increases to corporations make price increases extremely likely.  They certainly do not reduce inflation.

The only things I can see in the bill that might lower costs is the ability for Medicare to negotiate drug prices, which starts in 2026 on ten drugs.

And they cap the out-of-pocket expense for Medicare Part D at $2,000, which starts in 2025.

These features certainly don't help reduce inflation now, as the bill implies, but most of the media cheers at the brilliant marketing and name of the bill.  Facts rarely matter.

Does anyone really think that hiring 87,000 additional IRS agents will reduce costs for the public?  Think of the additional non-productive compliance costs to individuals and businesses if audits are greatly expanded to pretend they can pay for this bill and reduce the deficit.

This morning I went to the local post office that was scheduled to open at 7:30.  It finally opened at 8:20.  The worker blamed management for not scheduling people to open.  Does anyone believe that the government can efficiently and effectively hire and train 87,000 new agents in a few years to administer the complicated tax code?

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