Inflation ‘Reduction’ Act Will Do The Exact Opposite
In a press conference on August 12, 1986, President Ronald Reagan said “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’”
He actually said variations of this quote many times throughout his career. There are far too many examples of how true these words are to put in one column.
The latest example of this is in the Democrats’ tax, spending, and climate bill – totally misnamed the Inflation Reduction Act.
A letter sent by 230 of the Nation’s leading economists said the “inaptly named ‘Inflation Reduction Act of 2022’ would do nothing of the sort, and instead would perpetuate the same fiscal policy errors that have helped precipitate the current troubling economic climate.”
The letter was sent to the House and Senate leadership and said the $433 billion in new spending “would create immediate inflationary pressures by boosting demand, while the supply-side tax hikes would constrain supply by discouraging investment and draining the private sector of much needed resources.”
The 230 signers included a former Chairman of the Council of Economic Advisors, a Nobel Laureate, a former head of the Office of Management and Budget, a former President of the Federal Reserve Board, and Professors from the Universities of Virginia, Princeton, Duke, Columbia, Chicago, Notre Dame, and many others.
The letter said the bill carried a “misleading label” applied to legislation that would have the “opposite effect” and that it “would add to the financial woes that Americans are already experiencing.”
For many years liberals have put motherhood and apple pie names on bills and usually the more mushy the title is, the worse and more harmful the bill is.
Mark Cuban, one of the stars of Shark Tank, said many years ago that if you want to make college “really expensive, make it free.”
When the government subsidizes anything, costs just explode because you remove most of the incentives or pressures to operate efficiently and economically like in the private sector.
If a private business wastes money or is inefficient, or if its employees are rude, it will soon go out of business. A government entity that does all that simply demands more money the next year and unfortunately usually gets it.
The federal government is good really at only one thing: taking what is a small problem for a few and turning it into a major problem for almost everybody.
Look at the two things the government has subsidized the most over the last 50 or so years: healthcare and higher education.
In the mid-1990s, I went to a reception in Lebanon, TN, the town where I was born. The doctor who delivered me brought my records. I asked him how much he charged back then. He said $60 for nine months of care and the delivery, but only “if they (the family) could afford it.”
Just before Medicare, healthcare costs were 5% of our GDP, and almost everyone could pay their medical expenses. Now, healthcare is almost 20% of the GDP, and some specialists have gotten very wealthy, and only people like Bill Gates and Warren Buffet can really afford it.
When I started at UT in 1965, tuition was $90 a quarter, and you could work part-time and pay for it. Democrat leader Steny Hoyer said it was $87 a semester at the University of Maryland.
No one got out of college in those years with debt unless they bought a car or refused to work. Now almost everyone gets out with a student loan debt, and some owe many thousands.
The colleges and universities started really pushing student loans and told students and their families, don’t worry, we will just get you an easy loan.
For many years the easy availability of these loans allowed universities to raise their tuition and fees at three or four times the rate of inflation. I saw one article a few years ago that said college costs were four times higher than they would have been if the federal government had not had this loan program.
Most all federal legislation really only helps people at the top; everyone else gets a few crumbs or nothing at all.
Correction: The article from which I wrote part of my August 22 column had wrongly attributed a quote criticizing the Trump raid to Neama Rahmani, president of West Coast Trial Lawyers. That quote was actually from another person, a former Trump lawyer. While the other lawyers quoted in that section were not Trump supporters, Mr. Rahmani has never stated publicly for whom he voted for president. I apologize.