The so-called Inflation Reduction Act is one of the greatest examples of deceptive marketing around today. Not only will the legislation fail to reduce inflation, it will further increase prices.
Inflation is fundamentally a problem of too much money chasing too few goods and services. It was hardly a surprise: In the last two years, the government has spent, borrowed and printed trillions of dollars while also hamstringing production in the economy. The result was a vast increase in the amount of money in circulation without comparable growth in the size of the real economy. All that extra money bid up the price up goods and services, a phenomenon we call inflation.
Unfortunately, this latest piece of legislation in Washington does nothing to solve the problem. It does not reduce the amount of money in circulation. Worse, it reduces the quantity of goods and services through measures like higher energy taxes and excessive regulation.
