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230 Economists Warn the US Government’s Proposed Inflation Reduction Act Will Fuel Inflation

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230 Economists Warn the US Government's Proposed Inflation Reduction Act Will Fuel Inflation

Last week, Democrats unveiled climate and health care legislation called the “Inflation Reduction Act,” and there’s a lot of debate over the name of the proposed public policy measures. After the legislation was revealed, 230 economists sent a letter to the country’s House and Senate leaders warning that the proposed policies will actually fuel inflation. The letter stresses that there is an urgent need to curb America’s inflationary pressures, ​​but further notes the “‘Inflation Reduction Act of 2022’ is a misleading label applied to a bill that would likely achieve the exact opposite effect.”

230 Economists Tell House and Senate Leaders That the Proposed Climate and Health Care Legislation Is Not a Good Idea While the US Faces ‘Dangerous Crossroads’

Inflation has been high in 2022 and the Federal Reserve has been trying to curb the problem by raising the federal funds rate. There’s been a lot of debate over whether or not the U.S. is in a recession after two consecutive quarters of negative gross domestic product (GDP) growth. On Friday, there was some positive news, as the latest U.S. jobs report indicated that 528,000 jobs were added in July and unemployment data slid to pre-pandemic levels.

Amid the Ukraine-Russia war, tensions between China and Taiwan, and a gloomy global economy, U.S. Democrats have introduced new legislation to address climate change and health care called the Inflation Reduction Act. Democrats claim that the legislation will “make a historic down payment on deficit reduction to fight inflation.” The $739 billion Inflation Reduction Act package recently got the green light from U.S. politicians Joe Manchin and Chuck Schumer. The Arizona Democratic Senator Kyrsten Sinema was the last to show support for the proposed climate and health care legislation.

The politicians sponsoring the initiative also insist the policies will “invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030.” The act will be voted on Saturday and many people believe the legislation’s label is inaccurate and misleading. In fact, 230 economists wrote a letter to Chuck Schumer, Mitch McConnell, Nancy Pelosi, and Kevin McCarthy to tell them that the bill would increase inflation.

“At a time when the economy already faces supply/demand imbalances, the residual effects of stimulus, labor shortages, and supply chain disruptions, this bill would compound rather than alleviate many of these problems,” the letter states. The economists’ letter to the House and Senate leaders adds:

In particular, its $433 billion in proposed government spending would create immediate inflation pressures by boosting demand, which the supply-side tax hikes would constrain supply by discouraging investment draining the private sector of much-need resources.

Redditors From r/Economy Subreddit Openly Mock Analysis by the Global Warming Advocacy Group That Claims Inflation Reduction Act Will Help Americans Save Money

Of course, Democrats, left-leaning media publications, and non-profit think tanks have stated that the Inflation Reduction Act would reduce inflation and allegedly lead to savings. A Yahoo Finance article written by Akiko Fujita attempts to prove the bill will help Americans save money by citing a new analysis published by the non-profit group Rewiring America.

The 501(c)(3) Rewiring America is a global warming advocacy group managed by Arabella Advisors. The Washington, D.C.-based for-profit consulting company Arabella controls the Sixteen Thirty Fund, the New Venture Fund, the Hopewell Fund, and the Windward Fund. Arabella itself was founded by the former Clinton administration appointee Eric Kessler.

While the analysis asserts the Inflation Reduction Act could lead to $1,800 in savings for the average household, a significant majority of Redditors from the subreddit r/economy did not agree with Rewiring America’s claims. One person quoted Rewiring America’s modern home installation requirements, and stressed: “How the f*** can a low-income household afford these?” The person who posted the article to r/economy replied to the individual by saying it was “typical government idiocy.” The Redditor added:

The entire green movement is a money grab for this generation.

Many other Redditors discussed how politicians have a “higher than the average” point of view when it comes to what is perceived as “low income” in the United States. “Just skimming through the article shows that the ‘$1,800’ in savings the average household would ‘get’ is actually tax breaks for low-income families to install more efficient electrical equipment. Is this a joke?” another Redditor asked.

“Unfortunately for us, it isn’t a joke,” the thread’s author wrote in response to the joke question.

Republican Senators have made it clear that Joe Manchin’s and Chuck Schumer’s Inflation Reduction Act reforms deal will not get traction from the right-leaning party. “Senator Manchin, if you think you’re gonna get 60 votes to get the sweeteners that can’t be done in reconciliation, you need to think long and hard about what you’re doing,” Senator Lindsey Graham (R-S.C.) wrote on Friday.

What do you think about the letter 230 economists sent to House and Senate leaders about the proposed Inflation Reduction Act? Let us know your thoughts about this subject in the comments section below.

Reports Say Beijing Attacking Taiwan Could Lead to ‘Far-Reaching Economic Consequences’

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Reports Say Beijing Attacking Taiwan Could Lead to 'Far-Reaching Economic Consequences'

While the global economy remains gloomy and the war in Ukraine continues, there’s been significant tension between China and Taiwan. The American representative from California, Nancy Pelosi, plans to visit Taiwan this week and White House officials say China is preparing to carry out “military provocations.” Moreover, during the last few weeks, reports note that the global economy could crater if there’s a Chinese military attack on Taiwan.

Nancy Pelosi Is Visiting Taiwanese President Tsai Ing-wen This Week Despite Taiwan’s Tensions With China


Sources have explained to Reuters that California representative Nancy Pelosi is expected to be visiting Taiwan on August 2, 2022. CNN also confirmed that Pelosi was going to visit Taiwan, even though there’s a risk of provoking China. While the country is governed independently of mainland China, Beijing has always considered Taiwan part of the Chinese territory. Taiwanese president Tsai Ing-wen and the Democratic Progressive Party, however, favor Taiwan’s independent government that’s been operating independently since 1949.

In more recent times, tensions have grown sour between China and the island separated from continental Asia by the Taiwan Strait. China’s Xi Jinping classifies Taiwan the same way China classifies Hong Kong, with the “one country, two systems” formula. Tsai Ing-wen, the Democratic Progressive Party, and Kuomintang (KMT) reject the People’s Republic of China’s (PRC) concept often called the ‘One China’ rule. According to a Financial Times (FT) report, Pelosi is expected to discuss matters with the Taiwanese president on Wednesday.

Pelosi’s visit has stirred a lot of discussions concerning China using its military to show force in the Taiwan Strait. An ABC report notes that the White House has warned of China carrying out “military provocations” against Taiwan during the visit. The strategic coordinator for the U.S. National Security Council, John Kirby, told the press “[America], and countries around the world, believe escalation serves no one.”

“China appears to be positioning itself to potentially take further steps in the coming days and perhaps over longer time horizons,” Kirby said. Furthermore, Kirby added that “Beijing’s actions could have unintended consequences that only serve to increase tensions.”

Reports Note a Conflict Between China and Taiwan Could Spark ‘Economic Chaos’


While a recession is bad enough, the world is already dealing with the military conflict taking place in Ukraine against Russia. Adding a conflict between China and Taiwan could make matters much worse. A top trade negotiator from Taiwan’s capital of Taipei told Reuters that global trade flow issues would be greater than the issues stemming from the Ukraine-Russia war. The Taipei trader said that one of the biggest problems that could occur would be semiconductor shortages.

At the end of June, Bloomberg published a report that further verified the Taipei trader’s statements as the article said a China-Taiwan war could spark “economic chaos.” The report insists that China attacking Taiwan could “go well past semiconductors.” “A major war over Taiwan could create global economic chaos that would make the mess produced by Russia’s war in Ukraine look minor by comparison,” Bloomberg’s Hal Brands details.

Last week, the New York Times’ (NYT) Dealbook editorial highlighted that “an escalation from Beijing would have far-reaching economic consequences.” Much like the financial calamity that arose during the beginning of the Covid-19 pandemic and the market volatility that started during the Ukraine-Russia conflict, escalated tensions between China and Taiwan could cause global financial markets to tailspin from a recession to a depression.

Taiwan Strait Cut-off Fears and World War III Speculation


Similar to the Ukraine-Russia war, the U.S. and other countries could get involved by enacting financial sanctions against China and funding Taiwan’s military. NYT’s Dealbook explains that one of the biggest fears is that “Beijing will cut off access to all or part of the Taiwan Strait, through which U.S. naval ships regularly pass.”

The issues between China and Taiwan have also sparked speculation that these battles could start World War III. During the first week of July, the trends forecaster Gerald Celente spoke with Bitcoin.com News during an interview and he stressed that “World War III has already begun.” At the time, Celente discussed the conflict in Ukraine and the tensions between China and Taiwan.

The trends forecaster and publisher of the Trends Journal has been tweeting about China and Taiwan during the last 24 hours. In response, Celente published a blog post that explains the “U.S., once again, sends mixed message on foreign policy” in regard to Pelosi’s visit with Tsai Ing-wen.

What do you think about the economic consequences of a war between China and Taiwan? Let us know what you think about this subject in the comments section below.

10 Congress Members Ask Nancy Pelosi to Help Revise Crypto Provision in Infrastructure Law

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10 Congress Members Ask Nancy Pelosi to Help Revise Crypto Provision in Infrastructure Bill

Ten members of the U.S. House of Representatives have called on House Speaker Nancy Pelosi to address the problem with the crypto provision in the infrastructure law. They explained that the current definition of a broker in the law “would increase uncertainty in the cryptocurrency industry, pick winners and losers … all while eroding our country’s competitive edge against other countries in the digital asset marketplace.”

10 Lawmakers Urge House Speaker Pelosi to Address the Crypto Provision in Infrastructure Law

Ten members of the U.S. House of Representatives have jointly sent a letter to House Speaker Nancy Pelosi about the crypto provision in the $1 trillion bipartisan infrastructure bill which President Joe Biden signed into law this week.

The letter was signed by Representatives Darren Soto, Ro Khanna, Stacey Plaskett, Eric Swalwell, Tim Ryan, Susan Wild, Marc Veasey, Jake Auchincloss, Al Lawson, and Charlie Crist.

“We write to express our concerns with the digital asset provision (Section 80603) of H.R. 3684, the Infrastructure Investment and Jobs Act, otherwise known as the Bipartisan Infrastructure Framework (BIF),” the letter dated Nov. 15 begins. “As you and our colleagues in both chambers work to ‘build back better’ we must ensure appropriate taxation and regulation of the cryptocurrency industry,” it states.

Emphasizing that “those making gains in the cryptocurrency markets should pay their fair share of taxes,” the letter urges regulators to also “ensure this innovative technology is not making it easier for criminals to circumvent our laws and regulations.” It continues:

As it is written today, however, the BIF would increase uncertainty in the cryptocurrency industry, pick winners and losers, and thwart Internal Revenue Service (IRS) efforts to accurately tax cryptocurrencies, all while eroding our country’s competitive edge against other countries in the digital asset marketplace.

The lawmakers stressed, “We must have reasonable regulation on cryptocurrencies, but that legislation should not cripple the industry in doing so.”

The letter proceeds to explain the problem with the definition of a “broker” in the infrastructure law. “As it is drafted today, the provision would include miners and other validators, as well as software and hardware wallet makers, who do not engage in trading activities and are beyond the scope of brokerage services,” it explains. “Additionally, many entities included in this expansion have no ability to access the personal, customer information that brokers are required to report to the IRS.”

The lawmakers added, “Well-crafted regulation promotes innovation and American ingenuity,” elaborating:

As such, we request you to consider a pathway to address the digital asset provision of the BIF in future legislation and during ongoing discussions surrounding this provision.

“Your support will help ensure BIF does not capture validators, wallet providers, and others who do not have the ability to comply,” the letter concludes.

Last week, Senators Cynthia Lummis and Ron Wyden introduced a bill to amend the definition of a broker in the infrastructure law’s crypto provision. In addition, Senator Ted Cruz introduced a bill of his own to totally repeal the crypto provision. Currently, the requirements in the infrastructure law will not take effect until Jan. 1, 2023.

Do you think the crypto provision will be amended? Let us know in the comments section below.

$1.75 Trillion for Climate Change, Social Services — Biden’s ‘Build Back Better’ Plan Advances While Inflation Grips US

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This week, U.S. lawmakers are preparing to debate the advance of Joe Biden’s Build Back Better proposal, which is now estimated at $1.75 trillion. The new proposal follows the expansive monetary policy the Federal Reserve engaged in during the last two years expanding the money supply like never before. Meanwhile, U.S. inflation is at a 30 year high and the central bank’s Federal Open Market Committee (FOMC) plans to assess new strategies today.

Biden Slims Down ‘Build Back Better’ Plan

Last week, U.S. president Joe Biden offered a slimmed-down “Build Back Better” proposal from its original $3.5 trillion to the current estimate of $1.75 trillion. The proposal follows the massive monetary expansion that stemmed from the U.S. Federal Reserve adding credit to its member banks’ deposits.

In order to deal with the economic disaster caused by the government’s Covid-19 mandates, the Fed’s monetary expansion eclipsed two centuries of USD creation. The latest 1,600-page proposal from the Biden administration wants to leverage $1.75 trillion to tackle social service programs and climate change.

Reports note that $550 billion will be dedicated to combating climate change. The funding will be dedicated to the so-called climate crisis and the funds will be distributed to firms that address climate change and transition to clean energy. Biden’s plan is also aimed at childcare and the bill includes free preschool programs for all 3-4-year-old American children.

Moreover, the White House proposal also extends the Child Tax Credit for another 12 months. House Speaker Nancy Pelosi conceded that a number of items were cut from the bill but she highlighted that “universal pre-K, child care, child tax credit, home health care and the rest” made it into the package.

Additionally, Biden’s “Build Back Better” proposal will fund broadband services to help American families connect to the internet, but also provide an allocation of funds for free “desktops, laptops, and tablets to poor Americans,” according to The Verge’s contributor Makena Kelly.

Federal Reserve to Discuss Tapering Bond Purchases in the Face of Rising Inflation

At the same time, rising inflation is gripping the U.S. economy as fresh data published last week shows inflation is the highest it’s been in 30 years. In order to address the problem, the U.S. central bank plans to meet on Wednesday afternoon. It is assumed that the Fed will not raise the benchmark interest rate above zero but will likely discuss tapering back the $120 billion worth of bonds it purchases each month.

Other countries are facing the same decisions, as the Bank of England is meeting the day after the Fed’s FOMC meeting in order to discuss re-configuring interest rates. Reuters noted today that during the September 21-22 minutes FOMC members signaled that a “taper” of bond purchasing may be approved. The plan was described as an “illustrative tapering path,” and Reuters’ contributor Howard Schneider highlights that Fed officials still believe the current issues will be transitory.

“Fed officials still largely hold that view — By some time in 2022 they anticipate that global supply bottlenecks will have eased, pandemic-fueled demand for goods among U.S. consumers will cool,” Schneider’s report on Wednesday explains.

What do you think about Biden’s ‘Build Back Better’ plan to leverage $1.75 trillion? What do you think about the Fed assessing tapering back bond purchases? Let us know what you think about this subject in the comments section below.

‘An Act of War Against the Middle-Class’ — Americans Criticize Janet Yellen’s Idea to Tax ‘Unrealized Capital Gains’

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'An Act of War Against the Middle-Class' — Americans Criticize Janet Yellen's, Democrat's Idea to Tax 'Unrealized Capital Gains'

The 78th United States secretary of the treasury Janet Yellen told CNN’s “State of the Union” on Sunday that U.S. lawmakers are considering taxing unrealized capital gains. According to Yellen, the funds collected would help finance things related to climate and social change. While Yellen said that U.S. senator Ron Wyden (D., Ore.) was working on drafting the plan, a great number of Americans have been criticizing the proposal on forums and social media.

Janet Yellen Discusses Unrealized Capital Gains Tax Proposal, House Speaker Pelosi Approves


The phrase “unrealized capital gains” has been trending on social media and forums during the last 24 hours after the U.S. secretary of the treasury Janet Yellen discussed the subject on CNN’s “State of the Union.” Yellen explained the concept, which aims to tax Americans on unrealized capital gains stemming from liquid assets. Of course, like the controversial $600 IRS monitoring proposal, Yellen stressed that the proposal was aimed at “extremely wealthy individuals, billionaires.” Yellen emphasized, however, that the tax was not a wealth tax.

“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Yellen said on CNN. She explained that the Democrat senator Ron Wyden was working on the proposal, and House Speaker Nancy Pelosi is backing the concept. Although, despite Yellen saying it wasn’t a “wealth tax,” Pelosi’s (D., Calif.) words were different when she told CNN on Sunday: “We probably will have a wealth tax.”

Pelosi thinks the unrealized gains tax will help fund the $2 trillion spending bill and said the spending bill package was “pretty much there” and lawmakers are finalizing some of the “last decisions.” While Yellen, Democrats, and CNN have been lauding the idea of taxing unrealized gains, Americans are upset about the idea and consider it “unconscionable.”

Political Commentators, Libertarians, Crypto Enthusiasts Scorn Yellen’s Proposal — ‘Tax on Unrealized Gains Is Legal Plunder’


The 2020 Libertarian vice presidential candidate, Spike Cohen, said “This is unconscionable. For those who don’t know, an ‘unrealized gain’ is when something you own gains value, but you don’t sell it. You know, like your house. Or your retirement fund. So now you have to sell it, to pay the taxes. If implemented, this would be an act of war against the remaining middle-class folks who still actually own things,” Cohen added.

Cryptocurrency supporter and Galaxy Digital CEO Mike Novogratz shared his two cents about unrealized gains on Twitter. “Maybe try eliminating [the] step-up basis first. And carried interest,” the billionaire investor said. “That would be a start. Unrealized gains on illiquid securities would be [an] unmitigated disaster.” Independent journalist Jordan Schachtel explained that “taxing unrealized gains is only minimally about taxation itself. That’s not the bigger objective,” Schachtel remarked. The journalist added:

Taxing unrealized gains grants the government the ability to monitor your each and every move.


Nearly every post on social media and forums concerning this subject is littered with commentary that indicates Americans think taxing unrealized gains is a horrible idea. Except for mainstream media publications like the Wall Street Journal, Washington Post, The Hill, and other publications that continue to argue that the tax is aimed at the “billionaire-class” and “exceptionally wealthy individuals.” American journalist and Youtuber Tim Pool said that the proposal is merely a trick on people with no money.

“Wealth Tax, Unrealized gains, whatever,” Pool tweeted. “It’s a trick rich people are pulling on poor people who don’t understand how finance and the economy works. Wealth taxes will not do anything, people really don’t understand the power of that vast wealth.” Bitcoin proponent Stephen Livera stressed on social media that “Tax on unrealized gains is legal plunder. They created this mess and now they’re looking to pass the cost to the people.”

The evolutionary behavioral scientist and well-known author Gad Saad noted sarcastically that the unrealized gains tax was a good concept. “This sounds like a good idea,” Saad said scornfully. “Also, we should engage in punitive action on unrealized crimes. You find the person who looks guilty and you preemptively give them the chair (for community cohesion and diversity),” the author concluded.

What do you think about Janet Yellen and Nancy Pelosi telling Americans that lawmakers are planning to push through an unrealized gains tax in the upcoming $2 trillion spending bill? Let us know what you think about this subject in the comments section below.