Biden’s Favorite Economist Goes Rogue!
(RightWing.org) – Democrats entered 2021 with vigor and enthusiasm. For the first time in a decade, they controlled Congress and the Oval Office. Still, the margins in the House were razor thin and dead even at 50-50 in the Senate. Those aren’t numbers conducive to radically overhauling the government, economy, or society. Ultimately, President Joe Biden’s Build Back Better dream dwindled from $3.5 trillion to $1.5 trillion to a complete collapse over 6 months.
In late July, Sen. Joe Manchin (D-WV) compromised for a significantly scaled-back version of the bill with Senate Majority Leader Chuck Schumer (D-NY). They renamed it the “Inflation Reduction Act.” Yet, as America endures 40-year record high inflation, Democrats said the new proposal would help bring costs for consumers down. Now, the president’s favorite economist is contradicting the narrative.
Biden’s Favorite Economist Contradicts Claims
The Bureau of Labor Statistics (BLS) recently reported inflation hit 9.1%. For over a year, Manchin stated the principal reason for not supporting the Democrats’ wish list was due to a skyrocketing growth in prices. Many economists blamed the injection of nearly $2 trillion into the economy through the American Rescue Act as the chief culprit.
On Sunday, Manchin made the morning news rounds. He stated the Inflation Reduction Act would combat high costs by reducing deficits through tax hikes and price-fixing prescription drugs.
Moody’s Analytics chief economist Mark Zandi wrote Democrats were wrong. The expert emphasized the partisan reconciliation bill only cuts inflation by 0.33% by 2031. While it might slightly pull the economy in the right direction, Zandi noted Americans won’t feel any impact from the legislation until the third quarter of 2023, which amounts to a 0.01% decrease.
CBO Raises Alarms
The only one that benefits from high inflation is the government. Because prices of goods, services, and salaries go up, so do tax receipts. On August 3, the Congressional Budget Office (CBO) reported warnings about the Democratic narrative. It stated 90% of the bill’s influence on the deficit would come after 2026. That does little for the fast-paced rise in taxes and the prices of energy and consumer goods happening right now.
Some say the dangers for the economy are rampant in the legislation. It seeks to increase government revenues from corporations by $750 billion. Zandi said large businesses are likely to pass most of the taxes on to consumers, causing prices to continue rising. The nonpartisan Congressional Joint Committee on Taxation noted that amounted to a tax increase on everyone making less than $400,000 — another broken promise made by Biden in 2020.
So, if the new legislation spends billions of dollars immediately but only sees marginal savings long-term, are Democrats playing a shell game for political gain ahead of the midterm election?
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