The Democrats’ 2022 death wish

The Democrats, supported by many in the liberal mainstream media, are taking a victory lap for passing the $800 billion Inflation Reduction Act of 2022, a label that Gerry Baker, former editor of the Wall Street Journal, has deemed to be so inaccurate that he called it an insult to used car salesmen.

The political calculus seems to be that massive additional spending, higher taxes and more regulation — that trifecta that has cratered the American economy over the past year and driven Joe Biden to the some of the worst approval ratings for a president in history — will somehow work this time, severely testing the definition of insanity. The age-old Democrat formula of virtue-signaling on the environment, sticking it to large companies, and attempting to bribe selected voter groups is thought to be the perfect alchemy to win this November’s midterm elections and the presidential election in 2024? So, when you’re heading for a cliff, be sure to accelerate and, as you’re sailing over the edge, be sure to give all your passengers a high-five? I’m not thinking that’s a great strategy.   

At the moment, most Americans are deeply concerned about a faltering economy; massive inflation that hurts the middle class and poor the most; soaring food, gasoline and home energy prices; and an overbearing government that is rapidly eroding personal freedoms for all Americans — not to mention disastrous foreign policy that may be inching us closer to potential nuclear war with Russia, China, Iran or North Korea, you pick. Let’s just further drive up inflation and energy prices, prod Russia and China to war (not to mention the possibility of another phony payoff deal with Iran), do nothing at all for the environment — and celebrate. Is that really a platform on which the Democrats want to run? Now that’s an insult even to lemmings.

To put it in plain English, spending $800 billion more will continue to drive up inflation, pushing it toward 10 percent. Everyone will get hurt with that implicit “tax increase,” lower real wages, and collapsing savings and retirement plans. The Federal Reserve will be forced to take even more drastic action. No amount of rhetoric or political misdirection can change that.

The Democrats are already hemorrhaging Black and Hispanic voters from their core base. This will accelerate it, along with union members and other middle-class Americans. At this stage, if Biden and the Democrats say such economics will work, no one will believe them.

The energy/environment package is no better. The bill does nothing to change the current economic death spiral in energy economics — i.e., government mandated choking of energy supply and promoting high cost “alternative energy.” What it does is subsidize consumers — i.e., the government increases taxes and then bribes consumers with subsides. The net result of this grand deception is a growing economic burden on all Americans, but especially the middle class and the poor. It claims to support “social justice” while continuing to undercut the economic future of Black Americans, Hispanic Americans, and America’s middle class overall.

The bill also further subsidizes rooftop solar. Various studies confirm the only alternative energy that competes with fossil fuels on cost is utility-level solar. In short, the government will subsidize Americans to virtue-signal and install solar panels, but it will not stop the government cancer that is eating away at the economy.

The other problem is energy storage. Unlike fossil fuels and nuclear power, solar and wind cannot store energy — it is “use it or lose it.” To supply consistent “alternative” energy to America requires batteries. America has around nine quads of battery storage capacity. To supply sufficient power to run America’s industrial, home and transportation needs requires 90 quads, which is probably three decades away. It also requires doubling and hardening America’s electrical grid, which also is three decades away. It requires mining highly toxic battery materials, of which there is a limited supply that is increasingly controlled by our enemies.

And, speaking of which, Russia and China will continue to burn massive amounts of coal, so none of this will help the environment — but it will represent economic and military suicide for America.

In short, this is disastrous economic, energy and foreign policy that will serve only to drive the Democrats and America deeper into the hole.

At the same time, the new legislation does begin to recognize reality. It hints at support for natural gas and nuclear facilities to generate electric power. It suggests support for breakthrough forms of power generation and storage.

Finally, the act raises taxes on companies. Those taxes will lead to higher prices for food and other consumer goods and continue to fuel inflation. They will hinder the ability of companies to increase jobs and real wages. They will hinder investment and hurt the market, which in turn further erodes savings and retirement income.

The politics will be a disaster for Democrats. Americans will feel inflationary and other negative economic effects immediately. Much of the bill is pure pork and will never produce any real benefits. The subsidies (political bribes) will take years to be felt. The benefits from any breakthroughs in new energy production and storage will be decades away.

No matter how much you try to dress it up and promote it through friendly media, you cannot put lipstick on that much pork and expect to win elections. Will Americans buy a “great used car” from these Democrats in 2022 or 2024? No sale!

Grady Means is a writer (GradyMeans.com) and former corporate strategy consultant. He served in the White House as a policy assistant to Vice President Nelson Rockefeller. Follow him on Twitter @gradymeans1.