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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.

Krugman Says He Was ‘Wrong About Inflation,’ Summers Talks Recession, Biden Criticized Over ‘Half-Truths and Fibs’

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In mid-June red hot inflation reared its ugly head in America once again, as the latest U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) report indicated that inflation in June rose at the fastest pace in over 40 years. U.S. president Joe Biden has been in office for 18 months now, and media reports are beginning to note he was wrong about transitory inflation and his administration has made “dubious claims about inflation’s peak.” Meanwhile, the Biden administration and a few reports suggest there are “signs inflation may have peaked” in the U.S., as prices of commodities and oil have dropped in recent times.

Paul Krugman Says ‘I Was Wrong About Inflation,’ Larry Summers Claims ‘Odds Are Probably Better Than Half That a Recession Will Start Next Year’


On July 13, Bitcoin.com News reported on the June CPI report that noted inflation metrics that month reflected a 9.1% year-over-year increase. The increase in inflation in America recorded in June 2022 rose at the fastest pace since November 1981. The White House at the time noted that the CPI report was already out of date the day the Bureau of Labor published the data.

Following the latest CPI data, reports noted that West Virginia’s senator Joe Manchin snubbed Biden’s climate bill over inflationary concerns. While the sitting president has been criticized heavily for the inflation, on July 15, senior White House correspondent Alexander Nazaryan stressed in an editorial that inflation has become “Biden’s political nightmare.”

Inflation has jumped so high that the American economist and Nobel winner, Paul Krugman, wrote an article for the New York Times noting that he was “wrong about inflation.” Krugman specifically talked about the American Rescue Plan and he mentioned that some economists warned it would lead to rising inflation. Krugman said that he like many other Keynesian economists were more “relaxed” about the stimulus package.

“As it turned out, of course, that was a very bad call,” Krugman wrote on July 21.

Krugman also quickly mentioned Larry Summers, a former economic adviser to ex-president Barack Obama. Summers spoke about a recession recently at the Aspen Security Forum. Summers explained that the “odds are probably better than half that a recession will start next year.” The economist also touched upon the prices of crude oil and commodities, and further highlighted problems with “the geopolitical situation.”

“I think this will depend a lot on what happens outside the economic realm,” Summers said at the Aspen Security Forum. “It will also depend on how lucky and, you know, how skillful the [Federal Reserve] turns out to be … They’ve got a very, very difficult problem of balance in setting monetary policy, given the situation in which we find ourselves,” he added.

Biden’s ‘Half-Truths and Outright Fibs’ Called Out


A few recently published reports are started to call out the Biden administration’s “dubious claims about inflation’s peak.” For instance, Kevin A. Hasset, an author from nationalreview.com discussed Biden’s excuses and a “new all-time low for economic communication.”

“Biden is even claiming that two negative quarters in a row are not a recession,” Hasset writes. Hasset, a senior adviser to the National Review Capital Matters, concludes by saying “students of economic history know better. Indeed, there will be no controversy whatsoever when the story of this year is written, and that history is worth keeping in mind while the spin machine spins.”

On July 20, 2022, two opinion contributors for The Hill, EJ Antoni and Stephen Moore, published a post called “Biden’s six favorite lies about inflation and the economy.” The authors summarize “the most economically consequential deceptions of the Biden administration.”

Deceptions include telling people “Nobody making under four hundred thousand bucks will have their taxes raised,” which turned out to be false. The authors criticized the White House for saying inflation is worse everywhere except for the United States, and when Biden said the economy stalled when he entered office 18 months ago. Moore and Antoni accuse Biden of exaggerating like when the U.S. president told the press he was responsible for the strongest job creation economy in modern times.

“This is more an exaggeration than a bold-faced lie,” The Hill’s opinion contributors wrote. Lastly, the authors give Biden flak for saying American families are carry less debt and savings are up under his administration and how Biden has noted that he’s been doing everything he can to get gas prices lower.

“Perhaps none of these half-truths and outright fibs should be too surprising — What should we expect from the administration that first denied inflation, then said inflation was transitory, then claimed it was only a high-class problem?” the opinion authors conclude.

Meanwhile, Biden is also accused of telling people if they got vaccinated they would not catch Covid-19, at least four times in the past. Yet, the U.S. president is currently in isolation for contracting the illness after taking all of the recommended vaccinations and boosters.

Moreover, a report published by the Wall Street Journal (WSJ) now claims “there are signs inflation may have peaked,” according to specific signals in the U.S. economy. The WSJ cites the chairman of Evercore ISI, Ed Hyman, when he “pointed to many indicators that 9.1% might have been the top.”

What do you think about Krugman’s latest article and Summer’s odds concerning a recession in the U.S.? What do you think about the flak U.S. president Joe Biden is getting for his statements about the economy? Let us know what you think about this subject in the comments section below.

Fed’s Bostic Cautious About Rate Hikes as President Biden Blames Higher Prices on Covid-19 and Putin

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As inflation continues to wreak havoc on the lives of ordinary American citizens, all eyes are focused on the U.S. Federal Reserve’s plans to fix the situation. Meanwhile, as the St. Louis Fed president James Bullard wants to aggressively hike the benchmark bank interest rate, Atlanta Fed president Raphael Bostic thinks the central bank needs to use caution.

Atlanta Fed President Raphael Bostic: ‘The Fed Needs to Be Cautious as We Move Forward’


The U.S. economy looks bleak after two years of abnormal inefficiencies that have plagued the citizenry’s wealth. Blame has been placed on the erratic spending decisions of public policymakers, the Federal Reserve’s massive monetary expansion over the last two years, the supply chain shock from aggressive Covid-19 lockdown procedures, and the tightest sanctioned economy in decades stemming from the current Ukraine-Russia conflict. All of these factors have led to the fastest rising inflation rate the U.S. has seen in over 40 years.

On Monday, the president of the Federal Reserve Bank of St. Louis, James Bullard, explained that the Fed could get the benchmark bank interest rate up to 3.5% by the year’s end. Bullard mentioned an aggressive rate hike that could see the rate increase by 75 basis points like Fed chair Alan Greenspan did in 1994.

Despite Bullard’s intentions, a report written by Wall Street Journal authors Jon Hilsenrath and Nick Timiraos published on Monday says that “the Fed has never successfully fixed a problem like this.” Hilsenrath’s and Timiraos’s report further notes that “many factors are out of [the Fed’s] control” and “they are strikingly behind.”

While Bullard wants to raise rates drastically, Atlanta Fed president Raphael Bostic has expressed caution about aggressively hiking the benchmark bank interest rate. Speaking with CNBC’s Sara Eisen on Tuesday, Bostic said that he believes staying neutral is also a top priority.

“I think I’m in the same areas as my colleagues philosophically,” Bostic elaborated. “I think it’s really important that we get to neutral and do that in an expeditious way.” However, Bostic’s envisioned neutral benchmark rate is a lot different than Bullard’s 3.5% by Q4 2022. While it could be 2-2.5%, the Atlanta Fed president said he could also see the rate as low as 1.75%.

“I really have us looking at one and three-quarters by the end of the year, but it could be slower depending on how the economy evolves and we do see greater weakening than I’m seeing in my baseline model,” Bostic remarked during the interview. “This is one reason why I’m reluctant to really declare that we want to go a long way beyond our neutral place, because that may be more hikes than are warranted given sort of the economic environment.”

The Atlanta Fed president added:

[The Fed] needs to be cautious as we move forward. We do need to get away from zero, I think zero is lower than we should be right now. But at the same time, we need to just pay attention.

US President Joe Biden Blames High Prices on Covid-19 Pandemic and Russia’s Vladimir Putin


Of course, many are skeptical that the U.S. central bank will be able to fix the economy’s ongoing issues. Many blame the Fed’s monetary and asset expansion and the massive stimulus bills forwarded by former president Donald Trump and the current U.S. president Joe Biden.

However, Biden is blaming the poor economy on Covid-19 and Russia’s Vladimir Putin. “I know that families are still struggling with higher prices. I grew up in a family where if the price of gas went up, we felt it,” Biden said on Twitter on April 20. “Let’s be absolutely clear about why prices are high right now: COVID and Vladimir Putin,” the president added.

Biden’s statements got a lot of flack on Wednesday as fingers were pointed directly at the Fed’s money printing. “Sure it has absolutely nothing with the Federal reserve’s ‘money printer go brrrr for Wall Street,’” one individual said in response to Biden’s tweet. “Not all of us have dementia Joe, some of us are still cognizant and can see you and your administration are full of sh**,” the person added. Another individual replied to Biden and wrote:

Actually POTUS, it was because YOUR Federal reserve printed too much money during Covid. Don’t make Putin a scapegoat for your mismanagement of the economy.


What do you think about Atlanta Fed president Raphael Bostic saying the Fed should be cautious when it comes to interest rate hikes? What do you think about Biden blaming the U.S. economy’s flaws on Covid-19 and Putin? Let us know what you think about this subject in the comments section below.

Global Markets, Bitcoin Defy Expectations After Fed’s Hawkish Taper Plan Announcement

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Global Markets, Bitcoin Defy Expectations After Fed's Hawkish Taper Plan Announcement

Global markets have defied predictions as the U.S. Federal Reserve and several central banks worldwide are prepping to slow down monetary easing policy. On Wednesday, the U.S. central bank’s Federal Open Market Committee (FOMC) said it plans to taper quantitative easing (large monthly asset purchases) and end the program by March 2022. Moreover, the FOMC members decided to keep interest rates at zero but expect at least three rate hikes next year.

Federal Reserve Outlines Asset Purchase Tapering Plan and Rate Hikes for 2022

Since the onset of Covid-19 in the United States, the U.S. Federal Reserve initiated a monetary easing policy like no other in history. The move has led to a surge in inflation and analysts and economists worldwide have criticized the Fed’s decisions in recent times. The FOMC concluded a two-day meeting on Wednesday and the central bank explained that it plans to shrink its bond purchase program to $30 billion per month by January. This month the Fed will leverage $90 billion in quantitative easing (QE) purchases as opposed to last month’s $120 billion.

In addition to the tapering of QE, the FOMC members also detailed that the central bank has plans for three rate hikes next year. It expects three in 2022, two more rate hikes in 2023, and another two interest rate increases in 2024. The Fed did not, however, blame the rising inflation in the U.S. on its QE but instead noted that the inflation was caused by issues with supply and demand.

“Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation,” the FOMC said on Wednesday. Furthermore, the FOMC statements said Covid-19, and new coronavirus variants, have affected the U.S. economy a great deal.

‘Buy Rumors, Sell Facts’: Global Markets and Bitcoin Rise Following the FOMC Meeting

Despite the taper statements and disclosing that there will likely be three rate hikes next year, the Fed’s comments saw a market reaction opposite to what was predicted before the taper announcement. Nasdaq, NYSE, and the Dow Jones all saw gains after the FOMC meeting concluded. Speaking with Bitcoin.com News, Alex Kuptsikevich, the Fxpro senior market analyst, said the Fed “held the most hawkish edge of market expectations” on Wednesday.

“The FOMC announced that it would double the pace of tapering,” Kuptsikevich said. “The committee’s updated forecasts suggest three key rate hikes in 2022, although only six months ago, it expected none. We also heard that the balance of the Fed’s targets allows a rate hike to begin before achieving full employment due to higher inflation.”

“The Fed chairman also called financial asset valuations ‘elevated,’” the market analyst continued. “This is a clear signal of a willingness to hurt the markets, as he did in 2018. During the press conference, Powell noted that FOMC did not yet have a consensus on the timing of the Fed’s balance sheet cut. In the previous stimulus wind-down cycle, this was not an actual issue long after the start of the rate hike — The dollar index rallied within the first minutes after the FOMC, touching the highs from July 2020, but then it turned back down, losing 0.8% from the peak at the time of writing.”

Kuptsikevich added:

The feeling is that the markets have prepared for a risk-on, expecting softness from the Fed, and have not backed down despite the Fed’s rhetoric. Some commentators believe we saw a classical ‘buy rumours, sell facts’ reaction. However, the rise in ‘growth’ stocks speaks more about the market mood to end a strong year on a cheerful note. At the same time on the dollar, a wave of profit-taking growth in the last six months seems to have started, although the Fed’s stance is much more hawkish compared to other central banks from the DXY basket.

Even bitcoin (BTC) defied expectations on Wednesday, as the price kicked up a notch after the FOMC’s hawkish plans were announced. Just before the meeting ended, BTC was exchanging hands for $46,590 per unit and after the FOMC meeting came to a conclusion, BTC prices jumped to a $49,420 high on Wednesday afternoon (EST).

Bank of England Raises Benchmark Rate, European Central Bank Keeps Rates Held Down, US Jobless Claims Still Above Pre-Pandemic Levels

In addition to the FOMC meeting, the Bank of England (BoE) kicked up its benchmark rate to 0.25% from 0.1%. No other central banks have done this yet and the European Central Bank, like the Federal Reserve, kept its benchmark interest rate suppressed for now.

The European Central Bank explained that it will not raise borrowing rates until inflation settles. In addition, the U.S. weekly jobless claims published by the Labor Department indicate a rise last week. The Labor Department’s report shows jobless claims are still well above pre-pandemic levels.

What do you think about the Federal Reserve’s taper process and discussions about raising the benchmark rate three times in 2022? What do you think about the Bank of England raising its benchmark rate for the first time since the onset of the Covid-19 pandemic? Let us know what you think about this subject in the comments section below.

$1,200 Stimulus Check Would Now Be Worth $11,000 If Used To Buy Bitcoin

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Your $1,200 stimulus check would be worth over $11,000 today if you’d bought Bitcoin with it in April 2020.

Your $1,200 stimulus check would be worth over $11,00 today if you’d bought Bitcoin with it in April 2020.

On 27 March 2020, after the U.S. Government had brought our economy to a screeching halt through lockdowns and other mandates in a turbulent and misleading overreaction to the natural spread of a virus, President Donal Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

$1,200 payments were made to every American earning under the income limits, which were set at an adjusted gross income of $75,000, or $150,000 for married couples filing jointly. The majority of Americans fall in this category.

This event escalated an already out-of-control inflation problem in the U.S. The CARES Act brought $2.2 trillion more dollars into the economy, and set the precedent for even more money printing. The problem of printing more money is that of decreasing marginal utility. As the Fed prints, the amount of money they need to fund whatever they like increases, and the subsequent printings must be of increasingly greater quantities to be of any consequence.

Do not be fooled. Money printing is not even a quick fix. It does nothing to stimulate the economy long term. Inflation is a covert, slow form of taxation. It thrives on your time.

The negative effects of inflation are felt by bankers and those who work in or with the government in high positions of power, those who are closest to the money printer last. Inversely, the effects are felt by the average Americans, and those abroad whose economies our government disastrously intervenes in (to control) to centrally plan, first.

The Cantillon effect is the U.S. Government raising the temperature ever so slightly, almost imperceptibly, so that you, the frog, don’t jump out of their fabled melting pot.

The misconception that we need inflation to support a growing population is an insidious robbery of every hour you have spent working. It is reckless. It is near-sighted. It is infantile. It is a breathtaking display of poor strategy. The value of your $1,200 stimulus check, if left in dollars, has only depreciated.

The value of your stimulus check held in Bitcoin has only appreciated. This is because, unlike the dollar, the supply of Bitcoin is ultimately fixed. Bitcoin has historically been adopted and purchased at a rate that far exceeds its ever decreasing, transparent, and scheduled inflation.

Thus, historically, Bitcoin has been great for both creating and maintaining wealth.

So the next time someone hands you a couple of free petrodollars, buy Bitcoin instead.