Issues & Insights

On The Anniversary Of The Inflation Reduction Act, Let’s Do Something About Inflation

The Biden administration recently celebrated the one-year anniversary of the passage of the Inflation Reduction Act (IRA) with one of the more amusing political circuses in recent memory.

President Joe Biden first commemorated the occasion in typical foot-in-mouth style by proclaiming, “I wish I hadn’t called [the Inflation Reduction Act] that. It has less to do with reducing inflation than it does providing alternatives that generate economic growth.”

A better way to frame it might be “providing alternatives than generating economic growth.”

After Biden said the quiet part out loud, his administration and surrogates seemingly went into damage control with tweets claiming the bill had successfully reined in inflation — even though the personal consumption expenditure index commonly used to measure it rose at a piping hot 4% pace over the past year. 

And while the administration was still popping champagne to memorialize its slaying of the inflation dragon, just days later the Federal Reserve announced that inflation is “unacceptably high,” and “still well above” the Fed’s long term goals. The Fed added, “most participants continue to see significant upside risks to inflation, which could require further tightening of monetary policy.” (Emphasis added)

The Biden administration wants you to believe inflation is kaput. The Federal Reserve, another quasi-branch of government, says otherwise. 

The pernicious effects of our stubbornly high inflation remain America’s greatest economic challenge. In truth, one can understand why this must frustrate Biden, given the fact that the COVID-era money-printing bonanza was initiated during Donald Trump’s last year in office. Of course, the Biden administration has done itself no favors by first claiming that this inflation was “transitory,” and then unleashing trillions of dollars in additional spending. Clearly, his administration bought into the far-left philosophy that massive Green New Deal spending programs could be paid for with “modern monetary theory,” and then underestimated inflation at every step of the way. Even if the seeds for higher prices were planted prior to his presidency, Biden dumped gasoline on the fire.

Rather than tackling the root cause of inflation — a devaluation of the dollar — the Biden administration instead set its sights on price controls and a public shaming campaign targeting any business that would dare raise prices in this atmosphere (such as “big” energy or poultry producers.) 

The administration even enacted devastating price controls on prescription drugs in the IRA, which predictably did not lower inflation, but will deny seniors access to new life-saving treatments and cures. Any cost savings will be directed toward more Green New Deal spending. Ironically, despite the consequences that seniors will suffer as a result of this legislation, it was endorsed by the AARP, which makes sense only once you follow the money.

If higher gas prices, grocery prices, and gold prices haven’t made it clear — Biden’s attempts at lowering prices by decree are not working.

Fortunately, there is still time for a course correction. One piece of legislation that may help us get there is a bill called the Centennial Monetary Commission, which was previously introduced in 2015 by Texas Republican Rep. Kevin Brady. The Centennial Monetary Commission would establish a neutral forum to chart a path forward for the Fed to stabilize the value of the dollar. If House Republicans or Biden want to show they are serious about fighting inflation, dusting off this old bill would be a good first step.

Regardless of one’s opinions on the IRA, evidence is clear the one thing this bill didn’t do was vanquish inflation. Biden has said as much. It’s time for Congress to pass a bill that does. 

Jon Decker is president of the Viante Foundation. Learn more at

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  • A 4% rate, which seems to me to bother very few people, is most destructive on long term investments. Two of the longest term investments are plant and equipment with depreciation lives of maybe twenty years or more and the second is retirement savings. Trying to recover capital in the presence of inflation is a major problem, but retirement savings impact everyone.

    There are two ways to look at this 4% inflation rate in its impact on retirement. The first is the real rate of growth. If a person looks for risk-free returns, those investments have a negative rate of return while the cost of living rises at 4%. Even modestly risky bets, such as to tier CDs, have a real rate of return less than 1% in such a situation. Using the rule of 72, 4% inflation cuts the value of money in half every 18 years. Thus, the early dollar saved for retirement is probably worth only about one dime and a few pennies by the time it is called back to pay for living expenses.

    Sustained 4% inflation is ultimately ruinous for retirees.

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