Washington, D.C. is an evidence-free free safe space for politicians who love to talk out of both sides of their mouths. Doublespeak and gaslighting are two tools that politicians use frequently to avoid reform of the federal government. It is undeniable that the government is not representing the will of the American people and politicians have done little to right the ship of state.
Just look at the recent announcement by the Biden Administration to impose new tariffs on de minimis imports of under $800 of textiles. This follows Vice President Kamala Harris calling former President Trump’s campaign promise to expand tariffs next year a “Trump sales tax” that would function as a national sales tax on American consumers. The action of the Biden-Harris Administration to expand tariffs while candidate Harris attacks Trump for wanting to expand tariffs in a different direction is laughable.
The Inflation Reduction Act (IRA) falls into the category of a law that has a name the opposite of what it does. The law was marketed to reduce inflation, yet it increased inflation. The law should be renamed the “Inflation Intensification Act,” because it accelerated government spending at a time when we are running annual $2 trillion deficits piled on an existing $35 trillion national debt. That law contains massive spending programs and price controls on drugs that will be destructive to the American healthcare system.
As a starting point, inflation is caused by the government – not the private sector and not by unbalanced trade. Nobel Prize winner in economics Milton Friedman said it best when he argued, “Inflation is made in Washington because only Washington can create money.” Friedman pointed out that private companies, unions, and consumers have no role in creating inflation. Only the government can print money and when the government spends more than it has, that creates a situation where the government is devaluing the U.S. dollar. The IRA spent more than it raised in revenues.
In typical fashion, the cost estimates that helped sell the IRA were large, yet far lower than the actual massive price tag. The Cato Institute cited Sen. Edward Markey (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY) as admitting “that cost estimates for the energy and climate portion of the IRA were initially $369 billion but have now grown to $1.2 trillion over its first 10 years ‘due to the uncapped nature of the clean energy tax credits’” and “between $2 trillion and $4 trillion by 2050.” The spending in the law is reason enough for a full repeal.
Another destructive element of the law is the provision that was marketed as controlling prescription drug costs. Under the law, the Biden Administration has imposed price controls, using the threat of tax hikes if a prescription drug company does not comply. Although it was marketed as a price negotiation, there is not much negotiation when only one side has the power to impose a tax on the other side. Ten drugs were the first target with the numbers increasing over time. This creeping socialism in drug prices will end up destroying innovation and remove a financial motivation for the pharmaceutical industry to lead the world in creating new life-saving drugs.
The federal government is becoming more socialist by the day when it engages in price controls to get the prices of drugs down instead of allowing market competition to do so. Doug Branch wrote at The Hill that “when President Biden and Vice President Harris blame inflation on price-gouging and ‘corporate greed,’ they are imitating Venezuelan dictator Nicolas Maduro. After all, Maduro has made that same or a similar assertion about greed each time he has imposed or tightened price controls. His actions in this regard, and the currently ruined state of his once-wealthy nation, are not merely coincidental.” To avoid a collapse of the healthcare industry, the federal government needs to abandon socialist price controls that destroyed the whole Venezuelan economy.
I believe in free markets and one way to solve some of our health care problems is to restore market principles. A wholesale privatization of government programs is not likely politically, yet a repeal of some of the most egregious provisions in law may be. Repeal of the price controls for prescription drugs should be agenda number one if Republicans sweep to victory this fall.
The Inflation Reduction Act’s impact on government spending, inflation, and creeping socialism is undeniably bad. It is time for Congress to repeal the IRA.