Yes, Words Do Mean Things Hold On to Your Wallets

Categories : Financial, News
August 3, 2022

In the Vice-Presidential debate of 2008, Sarah Palin uttered the famous line, “Say it ain’t so, Joe.” That was said to Joe Biden, but this week I was reminded of Sen. Joe Manchin, who previously would not support the latest Democrat spending bill until he saw July’s inflation numbers. Sen. Manchin suddenly couldn’t wait, so he agreed to the spending this past week. His prior words were meaningless.

The working name for the Senate Bill is “Inflation Reduction Act of 2022.” However, many economists believe that the Bill is likely to fuel increased inflation. In fact, according to the Senate Byrd Rule, the name will likely have to be changed, as there is virtually no chance that the result will be less inflation. Quite the opposite, in fact.

Congress has a long and sordid history of misnaming Bills and subsequently enacting them into laws. In the naming process, words are often meaningless and frequently turn out completely contrary. Some notable examples include:

  • Patient Protection and Affordable Care Act (a/k/a/ ObamaCare), which made health insurance and health care more expensive
  • Patriot Act, which resulted in less freedom from scrutiny by the government, antithetical to our founding fathers’ intent
  • American Recovery and Reinvestment Act (a/k/a “Stimulus”), which stimulated sign companies to announce projects, but somehow “shovel-ready jobs” were found lacking

Getting back to the Inflation Reduction Act of 2022., even the Administration admits that this Bill has a high cost for the first 3 years, with theoretical savings in years 4 through 10. Worse yet, another result would be increased taxes on all income levels, breaking another of candidate Biden’s 2020 campaign promises. Proposing tax increases when we are burdened with high inflation and a recession is socialistic thinking.

Economist Friedrich von Hayek said it best when he quipped, “If socialists understood economics, they wouldn’t be socialists.” This is reflected in the new “Inflation Reduction Act,” which was seemingly authored by socialist-leaning elected officials.

Conveniently, carefully chosen words obscure the truth. The Administration denies our current recession and continually prevaricates as to the cost of their proposed boondoggle. Changing the definitions of words and phrases does not alter simple economics. Words mean things. Or, used to, anyway. Hold on to your wallets (even tighter) if this Trojan Horse passes into law.

Van Wie Financial is fee-only. For a reason.