Biden’s massive Inflation Reduction Act was passed because of the politics at the time and did not actually help bring down the causes of inflation according to numerous economists interviewed by the Associated Press.
According to the economists, the enormous $740 billion piece of legislation passed a year ago had little no effect on bringing down the sky high inflation. President Biden has even said publicly that the Inflation Reduction Act was not meant to reduce inflation. In June 2022, inflation reached 9.1% and has now come down to 3.2% in July 2023, mostly due to the large interest rate hikes by the Federal Reserve.
The chief economic and budget analyst for the University of Pennsylvania’s Penn Wharton budget modeling said, “We can say with pretty strong confidence that it was mostly other factors that have brought inflation down. The IRA has just not been a significant factor.’’
Even before the Inflation Reduction Act was passed through Congress, the Congressional Budget Office (CBO) sent out a letter to legislators that the bill would have a negligible effect on inflation.
According to Harvard University ecomonist Jason Furman, “I can’t think of any mechanism by which it would have brought down inflation to date.”
During an August campaign stop in Albuquerque, New Mexico, President Biden told the crowd that the Inflation Reduction Act “has nothing to do with inflation: it has to do with the… $368 billion, the single largest investment in climate change anywhere in the world. And it’s beginning to take hold.”
Economists are in agreement with the many factors which increased inflation and now that we see the FED’s interest rate hikes slowing the economy, supply chains recovering, and oil prices not at record levels, inflation has decreased as a result and the Inflation Reduction Act was a political ploy to spend money on climate change projects.