How Will The Inflation Reduction Act Reduce Inflation?
It is a common right wing talking point that the Inflation Reduction Act will not reduce inflation. How do we counter this talking point? By emphasizing Deficit Reduction. The IRA includes billions in Deficit Reduction. Deficit Reduction was how Clinton helped create an economic boom back in the 90s.
Here is how it works- the Federal Government owes Banks and other Financial Institutions billions of dollars. If the Federal Government pays down the deficit by one billion dollars, then the Bank that receives that payment can turn around and lend that billion dollars to private business that is trying to expand. Multiply this by many billions dollars and and you have a massive financial and economic stimulus.
The Clinton Administration did this in the 90s and this was the stimulus and main cause of the economic boom. Paying down the Deficit by many billions of dollars frees up massive amounts of capital than can then be invested in economic expansion. This does not even address the massive economic stimulus that the IRA will create through developing a clean energy economy. So the Inflation Reduction Act will in fact reduce the Deficit and expand the economy.
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