The Inflation Reduction Act did nothing to address the causes of inflation and was instead named as such due to the politics of the moment, according to economists who spoke to The Associated Press.
Economists say that the $740 billion legislation, which was passed one year ago on Wednesday, does not deserve credit for bringing down inflation, and President Joe Biden has also come out to say that the legislation was not meant to address record-high inflation, according to the AP. Inflation reached 9.1% in June 2022 but has since come down to 3.0% in June and ticked back up to 3.2% in July.
“We can say with pretty strong confidence that it was mostly other factors that have brought inflation down,’’ Alex Arnon, economic and budget analyst for the University of Pennsylvania’s Penn Wharton Budget Model, told the AP. “The IRA has just not been a significant factor.’’
Before the bill was signed in August 2022, the Congressional Budget Office (CBO) said that the legislation would have a negligible effect on inflation, according to a letter by the CBO to Republican South Carolina Sen. Lindsey Graham.
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