More than 230 economists issue grave warning over ‘Inflation Reduction Act’, say it will worsen inflation

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As Democrats prepare to redouble the Biden administration’s reckless economic policies, a letter was sent to both the House and Senate, signed by more than 230 economists, warning that the impending Inflation Reduction Act would do nothing. does of that kind.

That passing the bill will in effect only add fuel to the fire, exacerbating 40-year high inflation, contradicting President Joe Biden’s and Democrats’ claims about the bill.

The bill, which now has all 50 Democrats on board, is expected to pass Saturday without a single Republican vote.

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Will make the economy worse

The economists stated that the economy is at a “dangerous crossroads” and that the “inappropriately named ‘Inflation Reduction Act of 2022’ would be nothing like that and would instead perpetuate the same fiscal policy mistakes that have helped accelerate economic growth.” current troubling economic climate.”

The letter went on to address the $433 billion in new spending in the bill. Such an increase in government spending “would create immediate inflationary pressures by boosting demand, while supply-side tax increases would limit supply by discouraging investment and stripping the private sector of much-needed resources.”

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The economists also point out that increasing the minimum tax on businesses will further hurt supply chain problems.

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No economic slouch

The signatories to the letter to Congress are not economic novices. These include Nobel laureate Vernon Smith, former chairman of the Council of Economic Advisers Kevin Hassett, former director of the Office of Management and Budget Jim Miller and former president of the Federal Reserve Board Robert Heller.

In addition, professors from the University of Chicago, Princeton University, Duke University, University of Virginia, Columbia and the University of Notre Dame signed the letter.

The letter’s recipients were Senate Majority and Minority Leaders, Senators Chuck Schumer (D-NY) and Mitch McConnell (R-KY), Speaker of the House, Representative Nancy Pelosi (D-CA), and Minority Representative from the United States. House, Kevin McCarthy ( R-CA).

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But even as experts try to warn of the impending economic disaster the bill could cause, Democrats are undeterred. From the Senate floor on Thursday, Schumer stated, “The Inflation Reduction Act will lower inflation, lower the cost of prescription drugs, close loopholes long exploited by big corporations that pay little or no taxes.”

Joe Biden also encouraged Congress to pass the bill, saying, “My message to Congress is this: listen to the American people.” He added,

“This is the strongest bill you can pass to lower inflation, further reduce the deficit, lower health care costs, address a climate crisis and advance America’s energy security and reduce the burden on workers and workers. reduce middle-class families.”

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Party-Line Bill

Republicans hoped that Joe Manchin would once again be the sole voice of reason in his party and not support the Inflation Reduction Act. Instead, weeks of negotiation paid off for Chuck Schumer, but not for the people of West Virginia.

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Finally, Schumer and Manchin agreed on a deal that Manchin could support, and he promptly relented. The same senator who once said, “If I can’t go home to explain, I can’t vote for it,” will now have to go home to a state that’s the country’s second-largest coal producer, and explain why he supports a bill that would impose a 7.2% tax on the coal industry.

sen. Kyrsten Sinema (D-AZ) was the last hope to sink the bill. On Friday, Sinema stated that, after some changes to the tax provision part of the bill, she is willing to support the bill.

She said: “We have agreed to remove the provision for deferred interest taxes, protect advanced manufacturing and boost our clean energy economy in the Senate budget reconciliation legislation.”

Sinema’s support virtually guarantees the bill’s approval in the Senate with the needed 50 votes and will go to the House next week for final approval.

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