A Lollapalooza of Boondoggles
Another $430 billion to combat the weather... plus $80 billion more to help tax you
(Source: Getty Images)
Bill Bonner, reckoning today from Ouzilly, France...
What will it say, in the Wikipedia of 3,000 AD? What will be the Judgment of History? We shudder to think…
Will it say about its geriatric politicians… that they were actively trying to stir up conflict with their neighbors, trading partners and rivals?
What will it make of its greatest economists and leading financial brains… pretending that people can be made richer by falsifying interest rates… lending money below the level of consumer price inflation… and “printing money” to cover budget deficits?
And what about the character of its citizens… who let themselves get ripped off… lied to… and held in contempt by their own elected leaders?
We can only guess…
Making America Broke Again
But first, we note that another lollapalooza of boondoggles is about to smash into the US economy. NBCNews:
Senate passes sweeping climate, health and tax package, putting Democrats on cusp of historic win
WASHINGTON — Senate Democrats narrowly passed a sweeping climate and economic package on Sunday, putting President Joe Biden and his party on the cusp of a big legislative victory just three months before the crucial November midterm elections.
After a marathon overnight Senate session, the 51-50 vote was strictly along party lines, with all Republicans voting no and all Democrats voting yes. After Vice President Kamala Harris cast the tie-breaking vote, Democrats stood and applauded.
What has been won? NBC explains:
The 755-page bill includes $430 billion to combat climate change and extend health care coverage, paid for with savings on prescription drugs and taxes on corporations. It puts hundreds of billions of dollars toward deficit reduction.
(We presume Nancy Pelosi’s husband papered up well in advance!)
The legislation is cynical and scammy, both in purpose and application. Will it result in better weather? It seems very unlikely. Will it reduce deficits? Almost certainly not. Will it lower inflation? Not a chance.
As is common for boondoggles of this sort, the spending is front-loaded – so the insiders get their money right away. As for the deficit and inflation reduction, they are barely loaded on the truck at all… and will never actually be delivered.
Congressional Free Passes
And the real-world results? It depends on the assumptions you make about the future. Here’s how the Tax Foundation scored it:
Last-week’s Democrat-sponsored Inflation Reduction Act (IRA), successor to the House-passed Build Back Better Act of late 2021, has been touted by President Biden to, among other things, help reduce the country’s crippling inflation. Using the Tax Foundation’s General Equilibrium Model, we estimate that the Inflation Reduction Act would reduce long-run economic output by about 0.1 percent and eliminate about 30,000 full-time equivalent jobs in the United States. It would also reduce average after-tax incomes for taxpayers across every income quintile over the long run.
By reducing long-run economic growth, this bill may actually worsen inflation by constraining the productive capacity of the economy.
But ‘climate change’ is a free pass into the public’s bank accounts. It is promoted by the press as much as the ‘War on Terror’ or ‘the attempted coup d’etat of January 6th’ or the ‘brutal Russian invasion of the peace-loving Ukraine.’ Practically every weather report blames ‘climate change’ – for excess heat… floods… drought… cold – everything. Logically, since the earth is a closed system, for every horror caused by ‘climate change’ there should be a delight elsewhere—rain in a dry area… warmth where it is normally cold… sunshine where clouds generally dominate. But no one mentions it.
Instead, for the first time in history, politicians are able to say that they are not only complaining about the weather; now they are doing something about it.
Another great crusade, in other words. Free the Holy Land. Drang nach Osten. Whip Inflation Now! And not coincidentally, make the elite richer and more powerful.
Wikipedia 3,000
But what will they think of it later? Not just a few years later… but 1,000 years… into the future. Will they see it in the same light? Will they get the names right? Who will be the heroes then? Herewith, a guess:
“In the year 2022, which is to say, during the lifetime of the great economic philosopher Bill Bonner, America’s decline was no longer a subject of speculation; it was undeniable. Aggressive meddling – brought forth from a mixture of conceit and incompetence – had brought the country to the threshold of ruin. Its citizens shot each other in US cities, while its army attempted to maintain the empire’s dominant position in the rest of the world. Most of its people got poorer, with wages rising at only half the rate of consumer prices, while it transferred billions of dollars to the richest families in the country.
“America’s economy – once the world’s most dynamic – had been fettered by boondoggles and weakened by the central bank management. And its attempts to rule the entire world… by murdering foreign leaders, sanctions, and active warfare… had driven its rivals together to oppose it.
“The next chapter was foreseeable by all but the American leadership itself.”
Tune in tomorrow for more from the Wikipedia of the Year 3,000.
Regards,
Bill Bonner
Joel’s Note: Nestled in the euphemistically-named Inflation Reduction Act is a not-so trivial $80 billion earmark for the Internal Revenue Service. If this seems like a lot of money… it’s because it is. The figure is more than 6 times the total annual budget of the… ahem… “service” (currently $12.6 billion).
So not only does the Inflation Reduction Act actually raise taxes on every class of American worker, it also enables the IRS to engage what The Wall Street Journal described as “beast mode,” by deploying “$45.6 billion to audit the middle class.” That’s enforcement, folks.
The problem, you see, has never been Congressmen (of both parties) wantonly frittering away your tax dollars… or shoveling money into their crony’s pockets… or front-running stocks on companies subject to their own regulatory pens… or smashing through each and every “debt ceiling” ever conceived… or using fear and propaganda to destroy the global economy (so they, and only they, can ride to the “rescue”… again, with your money)…
The problem is small businesses and middle class Americans and their stubborn refusal to simply get with the program. Don’t worry, though… according to “the service” itself, between March and June of this year, the IRS purchased $700,000 worth of ammo, a number that will undoubtedly skyrocket given their freshly fattened purse… so ordinary, working folks will soon have even more incentive to cheer their well-funded, well-armed overlords. Hooray!
The Jacobin Regime sure isn't behaving like a group that won a tight legitimate election. They could care less if the Sheeple have lost faith in the U.S. Government and its assorted alphabet agencies. A Banana Republic is just fine for this latest crop of miscreants. They might want to brush up on their history. The Jacobin's had a rough go of it after their Reign of Terror orgy :-) Yet another cold hard fact of life; Stolen elections have consequences :-)
It's a safe bet that none of the 50 Senators (plus one confused Vice President) who voted "Yes" read any of the bill's 755 pages. It's a safe bet that most of the bill was written by lobbyists to forward the interests of their clients. It's a safe bet that the bill will accomplish very little of its lofty goals, and may cause more harm than good.
The $80 billion to the IRS will enable more audits and fleecing of the middle class. The wealthy hire tax attorneys and accountants who are smart enough to outwit the IRS folks, so they dislike, but do not fear, audits.