The Inflation Reduction Act is an Orwellian Ruse
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
A few billion dollars cannot move a multi-trillion inflation needle. Two types of inflation are in play: one is transitory, but the other is not. The Fed cannot control inflation, but we want to believe it can.
Congress has passed the Inflation Reduction Act (IRA), a degraded version of the failed $4 trillion Build Back Better Act. The IRA authorizes $433 billion in new spending.
But not to worry.
It raises $725 billion in new revenues (taxes), for a profit (“deficit reduction”) of $292 billion. We can argue about the assumptions that produce those numbers, but there are more important considerations: