Democrats, backed by many mainstream liberal media outlets, take a victory lap for passing the $800 billion Cut Inflation Act of 2022, a label former Wall Street editor Gerry Baker Journal, deemed it so inaccurate that it called it an insult to used car salespeople.
The political calculus seems to be that massive extra spending, higher taxes and more regulation – that trifecta that has cratered the US economy over the past year and led Joe Biden to one of the worst approval ratings for a history president – will somehow work this time, severely testing the definition of insanity. The Democrats’ age-old formula of pointing virtue to the environment, sticking it to big business and trying to bribe certain groups of voters is seen as the perfect alchemy to win November’s midterm elections and l presidential election of 2024? So, when heading towards a cliff, be sure to speed up, and when cruising the edge, be sure to give all your passengers a high five? I don’t think that’s a great strategy.
Today, most Americans are deeply concerned about a failing economy; massive inflation that hurts the middle class and the poor the most; soaring prices for food, gasoline and home energy; and an authoritarian government that is rapidly eroding the individual freedoms of all Americans – not to mention the disastrous foreign policy that could bring us closer to a possible nuclear war with Russia, China, Iran or North Korea, you name it. to choose. Let’s raise inflation and energy prices again, let’s cause war between Russia and China (not to mention the possibility of another bogus deal with Iran), do nothing at all for the environment – and let’s celebrate. Is this really a platform Democrats want to run on? It’s an insult even to lemmings.
To put it bluntly, spending $800 billion more will continue to drive up inflation, pushing it towards 10%. Everyone will be harmed by this implicit “tax hike”, the fall in real wages and the collapse of savings and pension plans. The Federal Reserve will be forced to take even more drastic measures. No amount of rhetoric or political misdirection can change that.
Democrats are already hemorrhaging black and Hispanic voters from their grassroots base. This will speed him up, along with union members and other middle-class Americans. At this point, if Biden and the Democrats say such an economy will work, no one will believe them.
The energy/environment package is no better. The bill does nothing to change the current economic death spiral in the energy economy – that is, the government has mandated the choking off of energy supplies and the promotion of a high-cost “alternative energy”. What it does is subsidize consumers — that is, the government raises taxes and then bribes consumers with subsidies. The net result of this grand deception is a growing economic burden for all Americans, but especially for the middle class and the poor. It claims to support “social justice” while continuing to undermine the economic future of Black Americans, Hispanic Americans, and the American middle class as a whole.
The bill also further subsidizes rooftop solar. Various studies confirm that the only alternative energy that rivals fossil fuels on cost is solar at the utility level. In short, the government will subsidize Americans to signal virtue and install solar panels, but that won’t stop the government cancer that’s eating away at the economy.
The other problem is energy storage. Unlike fossil fuels and nuclear power, solar and wind power cannot store energy – it’s “use it or lose it”. To provide constant “alternative” energy to America, batteries are needed. America has about nine quads of battery storage capacity. To provide enough power to meet America’s industrial, domestic, and transportation needs, it takes 90 quads, which is probably three decades away. It also requires doubling and strengthening the US electric grid, which is also three decades away. This requires the mining of highly toxic battery materials, the supply of which is limited and increasingly controlled by our enemies.
And, speaking of which, Russia and China will continue to burn massive amounts of coal, so none of this will help the environment – but it will represent economic and military suicide for America.
In short, this is disastrous economic, energy, and foreign policy that will only serve to drive Democrats and America deeper into the hole.
At the same time, the new legislation is beginning to recognize reality. He alludes to support for natural gas and nuclear facilities to generate electricity. He suggests supporting revolutionary forms of energy production and storage.
Finally, the law increases corporate taxes. These taxes will drive up the prices of food and other consumer goods and continue to fuel inflation. They will hamper the ability of businesses to increase jobs and real wages. They will hamper investment and hurt the market, further eroding retirement savings and income.
Politics will be a disaster for Democrats. Americans will immediately feel the inflation and other negative economic effects. Much of the bill is pure pork and will never yield any real benefits. Subsidies (political bribes) will take years to show up. The benefits of any breakthrough in new energy generation and storage will be decades away.
No matter how hard you try to dress it up and promote it through friendly media, you can’t put lipstick on that much pig and expect to win an election. Will Americans buy a “used super car” from these Democrats in 2022 or 2024? No sale!
Grady Means is a writer (GradyMeans.com) and former business strategy consultant. He served in the White House as a political aide to Vice President Nelson Rockefeller. Follow him on Twitter @gradymeans1.