Thoughts on the “Inflation Reduction Act of 2022”?

[FreelancePoliceman]

The Inflation Reduction Act is not Designed to Reduce Inflation

The bigger issue is that the United States suffers from a chronic lack of state capacity. It struggles to pass all but the most paltry legislation. It cannot get out in front of its problems and it cannot even solve crises as they arise. So, it papers over its dysfunction by measuring spending in decades rather than in years, by sticking that extra zero on the end of every number. Seven hundred billion sounds much better than seventy billion. It almost sounds like somebody’s doing something. But it’s the sound of silence.

[Metamorph]

The Inflation Reduction Act is not Designed to Reduce Inflation

Of course, it's designed to give money to the IRS and the IRA (OK, an IRA is certainly something very different from the IRA.)

[Poptart]

The Inflation Reduction Act is not Designed to Reduce Inflation

https://twitter.com/cityafreaks/stat...-RL1DUDahgp2Ww

[Poptart]

The Inflation Reduction Act is not Designed to Reduce Inflation

To fight inflation, the government would need to be doing some combination of three things:

It could actively work with other countries to unblock supply chains or establish replacement trade links.
This might involve, say, talking to the Venezuelans or the Iranians and normalizing relations with them in a bid to drive down oil prices. Or it might involve asking our trade partners in East Asia to relax their zero-COVID policies to reduce interruptions in production. The federal government won’t do these things, because it is loathe to admit to Venezuela, Iran, China, and other countries that it needs their help. It has no desire to make any concessions to any of these states. It would rather allow American workers to suffer than look so sheepish. It certainly would rather let inflation run loose than negotiate with the Russians on an end to the war in Ukraine.

I’m not an expert in international relations—could it really be that simple? China would end it’s zero-covid policies if only the US asked them nicely?

It could embark on a longer, slower project of creating new industries in the United States to alleviate the cost of living crisis.

For instance, the government could start a publicly run energy company and use that energy company to offer energy to ordinary Americans at a subsidized cost. Mexico has a state-owned oil company, called Pemex. Because Pemex belongs to the Mexican state, Mexico can subsidize the oil Pemex drills, offering immediate relief to Mexican consumers. We could do something similar here. Private oil companies would not like having an American state-owned competitor, and the political obstacles would be sizable. But a president serious about alleviating pain at the pump could use this crisis to mobilize the public. Once prices are alleviated, a public energy company could be a source of future revenue, and it could lead to the creation of a sovereign wealth fund. Norway does something similar. No one in American politics seriously discusses any of these possibilities, because no one is serious about actually helping Americans deal with the cost-of-living crisis. The Democrats are happy to use higher gas prices to push Americans to buy electric cars, while the Republican strategy is to open nature preserves to private drilling. Neither will make any near-term difference to inflation.

Setting aside that the bill incentivizes clean energy development in the long-run, and never mind that his suggestion is a change of ownership and not a creation of a new industry. Is a public take-over of the fossil fuel industry really the most cost-effective policy? “No one in American politics seriously discusses any of these possibilities, because no one is serious about actually helping Americans deal with the cost-of-living crisis.” I don’t like this blogger’s assumption here. People can disagree with him on policy and want to help the country at the same time lol.

It could dramatically raise taxes on wealthy oligarchs, and use the revenue to fund the above.

Conservatives like to propose tax cuts during periods of high inflation, because they think taxes discourage the private sector from expanding production and resolving supply chain issues. But sometimes the private sector isn’t capable of resolving supply chain issues in a timely manner, and state investment is necessary to bring immediate relief. It must also be remembered that wealthy people have contributed to inflation by bidding up the value of all sorts of assets. They’ve dumped money into the stock market and the housing market, and their speculation has fueled a series of bubbles in things like cryptocurrencies and NFTs. Too much investment chasing too few profitable sectors leads to bubbles and herd behavior. It would be much better if the state took some of that money and used it to solve the actual, existing supply chain problems. In the long run, private investors would have better opportunities if the state acted in a more proactive manner.

The bigger issue is that the United States suffers from a chronic lack of state capacity. It struggles to pass all but the most paltry legislation. It cannot get out in front of its problems and it cannot even solve crises as they arise. So, it papers over its dysfunction by measuring spending in decades rather than in years, by sticking that extra zero on the end of every number. Seven hundred billion sounds much better than seventy billion. It almost sounds like somebody’s doing something. But it’s the sound of silence.

The CBO makes long term projections. This is nothing new and literally happens all of the time.

[FreelancePoliceman]

I’m not an expert in international relations—could it really be that simple? China would end it’s zero-covid policies if only the US asked them nicely?

"Asking them nicely" is not what was suggested, and hostilities with Iran and Venezuela are something that the US could easily work to change, if it had any interest in that.

Setting aside that the bill incentivizes clean energy development in the long-run, and never mind that his suggestion is a change of ownership and not a creation of a new industry. Is a public take-over of the fossil fuel industry really the most cost-effective policy?

Who exactly do you think should create these new industries? Why aren't they doing that now?

The article gave examples of states using their oil wealth for the public good. These models are successful; the suggestion was to consider emulating them.

“No one in American politics seriously discusses any of these possibilities, because no one is serious about actually helping Americans deal with the cost-of-living crisis.” I don’t like this blogger’s assumption here. People can disagree with him on policy and want to help the country at the same time lol.

Who is "people?"

The CBO makes long term projections. This is nothing new and literally happens all of the time.

I don't know what your point is, and secondly the country in a spiral of terminal decline; what Congress does "all the time" is part of that process.

[Poptart]

"Asking them nicely" is not what was suggested, and hostilities with Iran and Venezuela are something that the US could easily work to change, if it had any interest in that.

Was referring to China's zero-covid policies wrt supply shocks, and "asking them nicely" is what he suggests here: "Or it might involve asking our trade partners in East Asia to relax their zero-COVID policies to reduce interruptions in production. The federal government won’t do these things, because it is loathe to admit to Venezuela, Iran, China, and other countries that it needs their help."

The article gave examples of states using their oil wealth for the public good. These models are successful; the suggestion was to consider emulating them.

Right, and I asked if nationalizing the fossil fuel industry would be the best policy for making gas cheaper for Americans.

Who exactly do you think should create these new industries? Why aren't they doing that now?

I don't understand this question.

I don't know what your point is, and secondly the country in a spiral of terminal decline; what Congress does "all the time" is part of that process.

The CBO is not congress. My point is that the blogger is grasping at straws here: "So, it papers over its dysfunction by measuring spending in decades rather than in years, by sticking that extra zero on the end of every number. Seven hundred billion sounds much better than seventy billion. It almost sounds like somebody’s doing something".

[FreelancePoliceman]

Was referring to China's zero-covid policies wrt supply shocks, and "asking them nicely" is what he suggests here: "Or it might involve asking our trade partners in East Asia to relax their zero-COVID policies to reduce interruptions in production. The federal government won’t do these things, because it is loathe to admit to Venezuela, Iran, China, and other countries that it needs their help."

My point was that you're trying to make suggestions for literally anything other than the status quo sound ridiculous. "Asking them nicely" is interpreting the word "asking" literally, when obviously it's meant to mean a negotiation.

Right, and I asked if nationalizing the fossil fuel industry would be the best policy for making gas cheaper for Americans.

You do it again here. Rather than concede that any alternatives are worth considering, you say "I don't know that nationalization would make gas cheaper therefore it's wrong to consider doing anything else than what we're currently doing."

I don't understand this question.

You wanted to talk about developing new industries. What industries? Who should develop them?

The CBO is not congress. My point is that the blogger is grasping at straws here: "So, it papers over its dysfunction by measuring spending in decades rather than in years, by sticking that extra zero on the end of every number. Seven hundred billion sounds much better than seventy billion. It almost sounds like somebody’s doing something".

How is that "grasping at straws?" In ten years housing is still going to be unaffordable for most people, either because the current trend has gotten worse or because a price crash has plunged the country into another depression. Going to the hospital is still going to cause bankruptcies. You'll just blame it all on the other neoliberal party though, so I don't know why you care about this bill since it won't matter anyway.

[Poptart]

My point was that you're trying to make suggestions for literally anything other than the status quo sound ridiculous. "Asking them nicely" is interpreting the word "asking" literally, when obviously it's meant to mean a negotiation.

"Or it might involve asking our trade partners in East Asia to relax their zero-COVID policies to reduce interruptions in production. The federal government won’t do these things, because it is loathe to admit to Venezuela, Iran, China, and other countries that it needs their help."

Sorry but you’re being unreasonable. If anything I was being too generous with my interpretation.

You do it again here. Rather than concede that any alternatives are worth considering, you say "I don't know that nationalization would make gas cheaper therefore it's wrong to consider doing anything else than what we're currently doing."

I ask if there are better alternatives to nationalizing the fossil fuel industry and you tell me that I can’t concede to any alternatives. I can’t even ツ

[Poptart]

Rather than concede that any alternatives are worth considering, you say "I don't know that nationalization would make gas cheaper therefore it's wrong to consider doing anything else than what we're currently doing."

Btw that’s not what I said at all. Like not even close.

How is that "grasping at straws?" In ten years housing is still going to be unaffordable for most people, either because the current trend has gotten worse or because a price crash has plunged the country into another depression. Going to the hospital is still going to cause bankruptcies. You'll just blame it all on the other neoliberal party though, so I don't know why you care about this bill since it won't matter anyway.

Are we reading the same blog post? Idk how else to explain this for you. The last paragraph in the blog post is a clear reference to the dollar amount in revenue that the bill would raise over 10 years. That amount is $700b. The author takes issue with politicians saying “$700b over 10 years”. I guess he would prefer them to say “$70b a year, over the course of 10 years”. (One funny thing about this which I haven’t mentioned is that his preferred wording is probably less accurate since it assumes that the revenue raised in year 1 will be the same as in year 10).

[timber]

My point was that you're trying to make suggestions for literally anything other than the status quo sound ridiculous. "Asking them nicely" is interpreting the word "asking" literally, when obviously it's meant to mean a negotiation.



You do it again here. Rather than concede that any alternatives are worth considering, you say "I don't know that nationalization would make gas cheaper therefore it's wrong to consider doing anything else than what we're currently doing."

Yeah, but that's communism! What kind of socialist are you? /s