Over the past few nights you have heard my double criticism of the so-called “Inflation Reduction Act“A $750 billion monster that won’t cut inflation, won’t cut global warming, raise taxes on middle-class workers, deepen the recession, and don’t have an iota, speck, ounce, or ounce of economic growth stimulus.
An Economist/YouGov poll shows that only 12% think the bill will reduce inflation, but 40% think it will increase inflation. Speaking of recessionwe had a soft retail sales count today and the Atlanta Fed’s GDP tracker fell to 1.6% growth in the third quarter, from 2.5% just ten days ago and, as you know, GDP fell in the first two quarters of the year.
Big-box retailer Target reported a 90% decline in profits and sales fell well below estimates. Yesterday, housing starts and permits dropped significantly. A new TIPP poll showed that 62% of Americans believe the US is in recession.
While the Biden Democrats have repealed Donald Trump’s successful tax cuts, deregulation and energy dominance policies in just 20 months, the economy has gone from boom to bust, but until the GOP retakes Congress and saves America by repealing this bill, we are will have to live with this monster.
THE INFLATION REDUCE ACT CHANGES TAX CREDITS FOR ELECTRIC CARS
I would therefore like to point out two important energy supplies that you may not be familiar with. Both are insane. The first is the National Climate Bank, a $27 billion government bank to be managed by the US Environmental Protection Agency, the EPA. Now you may be wondering what banking or credit risk or payment facilities the EPA has. If you guessed “none”, you’d be right.
This is a green “slush fund” to dole out favors to Biden’s political allies. There is a $7 billion bucket for low-income and underserved communities to reduce greenhouse gas emissions. There is also an $8 billion set aside for low-income and underserved communities to fund direct or indirect investments in renewables that lack financial access and a third $12 billion bucket to be used broadly to support renewable energy nationwide. support projects.
In other words, no obligations. I think it would be much more efficient if the government wrote a simple direct check to the Democratic National Committee. Right? But that is not everything.
Also buried in the legislation is $250 billion for the Energy Department. For context, the entire DOE budget in FY 2021 was approximately $40 billion. Now, just to be sure, the $250 billion is mostly loan guarantees, although there will be direct loans as well.
Again, you may wonder what banking experience the Energy Department has or how many credit risk officers they employ. Again, if you answered zero, you would be right. Washington wags call this Solyndra on steroids. Not bad and this is a bit like the story of the tax authorities. Remember when the bill created a second IRS by doubling the budget and number of agents? Double your fun, double your fun.
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When it comes to the Energy department, it is 600% your pleasure and pleasure. I see a Solyndra Industrial Complex growing up here overnight and, in the spirit of empirical rigor, it behooves me to take note of Bjorn Lomborg’s research, using the UN Climate Model, which calculates that the $400 billion climate spending binge will reduce global warming at best by 28 thousandths of one degree Fahrenheit or, at worst, by 9 ten thousandths of one degree Fahrenheit.
In other words, nothing. I really hope the cavalry comes to save America and repeal this bill.
This article is adapted from Larry Kudlow’s opening commentary on the August 17, 2022 edition of “Kudlow”.