Will the newly-passed “Inflation Reduction Act” actually reduce inflation? No, it will not. First, it does nothing to reduce inflation now and isn’t even intended to do so. Over the course of a decade it will reduce budget deficits by about $300 billion. Excess money, compounded by supply chain problems and delays in restarting oil refining, are what drives the inflation we have. The Fed is tightening interest rates to reduce that inflation. Most of Inflation Reduction Act’s deficit reduction will come between 2027 and 2031. The Inflation Reduction Act is just a time-sensitive label plastered onto a bill dealing with other matters.
Second, in the last year Congress has passed bills that increase deficits over the next decade by about $614 billion in the estimate of the Congressional Budget Office (CBO). As they taught us in elementary school, “612 take away 300 leaves 312.” Is that reality dangerously inflationary? No it is not. In 2021, US Gross Domestic Product (GDP) fell just short of $23 trillion. Spread over a decade, the $312 billion amounts to about 0.1 percent of GDP.
So, is it just pretty much a wash given the size of the American economy? Not in the eyes of conservative critics. The abandonment of the “small government” Reagan Revolution since the start of this century has renewed the expansion of government programs without seriously expanding the taxation to pay for it. Businesses have one responsibility: to make a profit for their owners within the law. For them, economic efficiency is—or should be—a little tin god. However, governments act from a complex of motives, not all of them purely economic. National security is one such imperative. A Navy Carrier Strike Group is a big, complex, and expensive operation. Now, nobody needs a Carrier Strike Group. Until they do. Then they need it in a hurry, not in ten years’ time. The United States Navy has eleven of them. Efficient? No way in Hell. Something to think about if you’re Xi Jinping? You betcha’. The same rationale applies to things like climate change.
In one sense, a question becomes how much we want the inefficient-by-necessity federal government expanding into new areas to shape production and consumption. Eventually, over time, the addition and expansion of programs with subsidies, regulations, and the impact of lobbyists can slow the economy. The underlying economy has provided much of what makes America different from other places. It is stronger, of course, than other states and able to influence change. It also has—mostly–provided the chance for individual improvement.
 Greg Ip, “Fiscal Agenda Doesn’t Help With Inflation,” WSJ, 12 August 2022.
 Either in a bipartisan fashion or through reconciliation.
 $278 billion for the veterans affected by toxic “burn pits”; $257 billion for the infrastructure bill; and $79 billion for the semi-conductor aid bill. That doesn’t mean that these things aren’t worth doing. Just means that we are going to put a big chunk of the cost on the credit card.
 Conservatives are the only critics of these policies. Back in the 2020 elections season, Progressives talked openly of “running the economy hot” to achieve their social policy goals. Our current experience is what they meant.
 See: Apoorva Mandavilli, “States Blame Federal Mix-Ups As Monkeypox Shots Are Lost,” NYT, 16 August 2022; David Fahrenthold, “Pandemic Fraud Claimed Billions Meant for Relief,” NYT, 17 August 2022. Front page stories in the Times two days running for pity’s sake.