Commentary

Klar: Inflation Reduction Act’ will throw fuel on the flames of stagflation

By John Klar

The folly of the Biden Administration’s recently announced “Inflation Reduction Act” recalls Orwellian slogans such as “Slavery is Freedom” – the plan will throw fuel on the flames of stagflation, while accelerating environmental deterioration. The Act proposes to raise revenues of an estimated $739 billion through taxes and fraud reduction, to then invest $306 billion in “deficit reduction” and $369 billion in “energy security and climate change” to “reduce carbon emissions by roughly 40 percent by 2030.” If ever there were a proposal failed out the gate, history will prove this one the kingpin.

The Biden administration seeded this inflation with massive spending for porky art projects and other profligate rewards, premised on COVID relief (when the pandemic had largely subsided). Americans have been told the resulting inflation was “transitory,” and that it was Putin’s fault, Trump’s fault, or the oil companies’ fault. But it is Joe Biden’s fault.

Inflaming the national deficit in excess of 30.6 trillion dollars, this childish economics is being extended by now spending more money on more pork, under the pretense of “reducing inflation” by paying down 1% of the deficit ($306 billion on $30 trillion). Of course this will do nothing to reduce inflation. And the failed Green New Deal gets promulgated via executive fiat under the guise of “economic relief.” What’s next – rescuing the nation from economic collapse by funding abortion clinics for late-term abortions and building gender hormone factories to supply young children with sterilizing drugs? 

There are no savings here. Renewable energy manufacturing will not reduce, but accelerate, climate change by subsidizing the energy and natural resources absorbed in manufacturing solar panels and EV cars that (on net) increase both pollution and CO2. It’s all a laughable charade: if one could laugh. How is accelerating the soot spewed from Chinese smokestacks to fund solar panels that low income Americans can’t afford equitable, let alone beneficial to the planet? Big Brother has no clothes.

Meanwhile, those inflationary policies to fund social justice arts projects take food off the American table. Fertilizer prices have tripled in less than two years, drought threatens both global and local food supplies, and disruptions in supply chains threaten scarcity of much more than just baby formula. Ground beef increased 36% in price in one year, but Joe Biden is rewarding the “renewables industry” instead of shoring up supplies, processing, and distribution of domestic food. Is he trying to starve Americans?

Printing money to fuel an economy is akin to pouring water in a car’s gas tank to extend mileage – it will do more harm than good. Arguably, if that money were invested in projects that will yield (true) economic growth, it could actually reverse stagflationary pressures. But $64 billion of the proposed spending will be for “Affordable Care Act extension,” and the $369 billion for climate change would be better invested in domestic DEF production facilities, regenerative agriculture incentives, underground aquifer preservation, increased border security, improved food distribution systems, increased domestic fertilizer production and storage, or expanded sourcing and production of essential microchip components. China and Russia dominate world fertilizer markets, but America’s President Nero is fiddling with solutions to global warming while his subjects starve.

Our American creed warns us against enemies both domestic and foreign. Clearly, President Biden’s Inflation Reduction Act will make our nation increasingly vulnerable to hostile foreign powers, while weakening us economically from within. As Milton Friedman warned repeatedly, the temptation for governments is to print money recklessly, and then to print more money as inflation soars, in a vicious cycle that eventually leads to collapse and poverty: “Inflation subject[s] low- and moderate-income persons to levels of personal income tax that could never have been voted for explicitly.” (Friedman, Money Mischief: Episodes in Monetary History, p. 256.)

That’s right, folks – the progressives are pretending to tax the rich to offset inflation, but that inflation creates an exponentially greater tax on those of modest means: regressively, inequitably, and without accountability. Social Security, pension, and medical benefits all shrink in real value in direct proportion to inflation, and never catch up. The Biden Administration is slashing the real value of government liabilities owed to Americans (accrued by workers when the dollar had more value) while silently taxing them and shrinking the real values of their dollar-denominated assets and current incomes. They are doing so while accelerating destruction of the ecosystem, boosting China’s manufacturing economy, rewarding wealthy corporate cronies, and ignoring the food supply and distribution crisis any child can see looming.

They call it the “Inflation Reduction Act” – the exact opposite of what it will achieve. It’s almost as if the federal government serves an unseen cabal of deluded elites, instead of We the People, Starving.

Republished from The American Spectator. The author is a Brookfield resident and candidate for Senate Senator from Orange County.

Categories: Commentary

4 replies »

  1. A spending bill to reduce a problem caused by too much spending. Only in clowny clown Biden land.

  2. Really well written. Wharton School of business raised an eyebrow to the bill too. It’s just tax hikes, a DISASTROUS minimum 15 percent tax that will punish investment and reward evasive behavior, and renewable boondoggles disguised as fighting inflation. I expected better of Manchin but he had to cave on something.

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