How the Inflation Reduction Act Failed to Reduced Electricity Costs in Pictures

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via Mike Shedlock

Let’s check in on the not exactly impressive energy and inflation results of Biden’s Inflation Reduction Act (IRA).

Data from the BLS, chart by Mish

Biden’s energy policy has been an inflationary disaster. And make no mistake, the IRA was nothing but energy policy, more precisely, climate policy.

The Inflation Reduction Act Is a Climate Bill

Bloomberg flashback, August 15, 2022: The Inflation Reduction Act Is a Climate Bill. Just Don’t Call It One.

“It does seem kind of wacky and counterintuitive for the most consequential climate legislation ever to be called the ‘Inflation Reduction Act,’” says Angela Bradbery, a professor of public interest communications at the University of Florida’s journalism school. “For the public, it’s probably more confusing than anything.”

Congress once passed bills with simpler and more intuitive names, such as the Clean Air Act. But today’s political and media landscape demands that legislation be packaged to steer public debate in a direction the sponsors can better manage.

“Words matter. Names matter,” says Ed Maibach, director of George Mason University’s Center for Climate Change Communication. “Inflation and the price of gas are top of mind concerns for most Americans today, so calling the bill the Inflation Reduction Act was a stroke of rhetorical genius.”

Since the IRA’s surprise unveiling on July 27, analysts have debated how much its contents pertain to inflation. “The IRA speaks to the high energy costs” Americans are struggling with, says Stokes.

Hoot of the Day: Rhetorical Genius

In retrospect, the name is such a disaster that Biden even admits so.

See also  Inflation expectations reach 20-year highs; Powell may soon face a Volcker-style pivot

Green New Deal by Another Name

Biden’s Green-Energy Price Shock

The Wall Street Journal comments on Biden’s Green-Energy Price Shock

Do White House officials pay electric bills? They strangely keep saying the President’s climate agenda is reducing electric-power rates even as the cost of running your dishwasher is sky-rocketing, as illuminated by the Labor Department’s consumer-price index.

By our calculation, electricity prices have increased 13 times faster under Mr. Biden than across the previous seven years. His policies aren’t entirely to blame. But most of it is a result of the left’s climate agenda, and the price increases will get worse.

Federal regulations, renewable subsidies and state green-energy mandates are forcing fossil-fuel and nuclear plants to retire prematurely. Solar and wind need backup from so-called peaker gas plants, usually at a hefty premium. During power shortages, spot prices can hit $10,000 per megawatt hour compared to $30 to $60 on a normal basis.

State net-metering programs also subsidize people with solar panels for excess power they remit to the grid. People without solar then pay more for the grid’s fixed costs, which are also growing as more renewables are added. In California an average customer without solar pays 10% to 20% more to subsidize solar.

How Much Did the IRA Cost?

It’s much worse than Moore suggests.

Inflation Reduction Act Cost

The following chart is courtesy of Penn Wharton.

A year ago I commented The Inflation Reduction Act Price Jumps From $385 Billion to Over $1 Trillion

The true costs begin to emerge.

The key word in that sentence is “begin”. Expect more revisions to this newly revised $1 trillioncost estimate.

Nothing in the bill will reduce inflation. It was a known lie right from the start.

Bear in mind, the $1 trillion and counting estimate does not factor in higher energy costs for consumers and businesses.

So let me ask again: How Much Did the IRA Cost?

It’s Been a Bloody Month for Bond Market Bulls

If you are a bond market bull, it’s been a tough month. Let’s review what happened, why, and what’s ahead.

US Treasury Yields from the New York Fed as of 2024-04-10

 

Earlier today I noted It’s Been a Bloody Month for Bond Market Bulls

Summation

The inflationary pressures include demographics, the IRA, energy policy, regulations, tariffs, child tax credits unless the Senate kills that, and another unconstitutional push by Biden for student debt cancellation.

And there’s much more. Click on the above link for details.


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