The national debt will skyrocket due to Biden policies such as the Inflation Reduction Act, whose actual cost is many times larger than Biden claimed when he tricked Senator Joe Manchin into supporting it, potentially adding over $2 trillion to the national debt. Biden claimed it would cost $433 billion, but financial experts at places like Goldman Sachs soon concluded it could cost $1.2 trillion or more. Now, the Cato Institute says it could cost $3 trillion, and could undermine transmission reforms needed to provide adequate and affordable electricity to the American people. As the Cato Institute explains,
A previous post showed that the total cost of the Inflation Reduction Act’s (IRA’s) energy subsidies could reach $3 trillion. Subsidies so large cause a lot of problems—one being that advocates of a robust electricity infrastructure, like me, are now skeptical of using federal policy to expand the transmission system, which is the network of high‐voltage wires and substations that make up the backbone of the power grid….Experts across the electricity industry argue that we need more transmission—bigger networks and massive transmission development—and we need it immediately. For example, the U.S. Department of Energy under President Biden and academic advocates of “net zero” policies are calling for aggressive expansion of the transmission system. Proponents of aggressive transmission expansion have a catchphrase: “There is no transition without transmission.” That is certainly true in the case of a transition to generation resources like wind and solar energy, which tend to be located far from demand centers….If the IRA subsidies remain in place through a period of rapid transmission expansion, the cost to American taxpayers and electricity customers will escalate.
The required amount of transmission is not small or cheap. Transmission advocates at Americans for a Clean Energy Grid cite the Princeton Net Zero report, which indicates that “high voltage transmission will need to double by 2030, at a cost of $360 billion, and triple by 2050, at a cost of $2.2 trillion, to achieve a zero‐carbon future by 2050.” Keep in mind this estimated cost of $2.2 trillion is in addition to the $2.5 to $3 trillion in subsidies for generators….At the end of 2022, the United States had more solar and wind energy projects vying to connect to the grid (1,247 gigawatts) than the total generating capacity of the existing system (1,199 gigawatts). Expanding the transmission system and giving these resources access to the grid will expose taxpayers to trillions in generation subsidies….Given this backlog of subsidy‐eligible projects, the consumer‐ and taxpayer‐friendly approach to transmission expansion hinges on whether Congress can remove the IRA’s subsidies for electricity generation first. Commissioner James Danly of the Federal Energy Regulatory Commission (FERC) summarized the issue during a House Energy and Commerce Committee hearing in May of this year…
Contrary to its name, the Inflation Reduction Act will not cut inflation. Economist Chris Edwards says it will “increase inflation by shrinking the economy’s supply side and intensifying the problem of too much money chasing too few goods.” The University of Pennsylvania’s Wharton School predicted that it would increase inflation this year.
It continues Biden’s record of massive, inflationary government spending. Biden’s big spending spawned inflation, according to economists like Bill Clinton’s Treasury Secretary, Larry Summers, and Obama advisor Steven Rattner. As Rattner noted in the New York Times, Biden has spent “an unprecedented amount” of taxpayer money, which resulted in “too much money chasing too few goods.”
The national debt is now over $33 trillion, up by trillions of dollars since President Biden took office. It’s now much bigger than the size of the entire U.S. economy.
Under the Inflation Reduction Act, taxpayers will be on the hook for bad loans to crony capitalists. As Phil Kerpen notes, the “bill authorizes” the Commerce Secretary, “Jen Granholm to make $250,000,000,000 in loan guarantees for ‘energy infrastructure.’ That’s a lot of Solyndras. If any substantial portion of these loans go bad,” the national debt will get substantially bigger.
As the New York Post points out, the bill dumps billions of dollars into “boondoggles” that serve as “a slush fund for Democrats.” For example, it includes “$60 billion for ‘environmental justice‘”, a code word for race-based wasteful spending. It may also result in increases in the launch price of drugs, which will cost consumers more.
Although costly, the Inflation Reduction Act pales in comparison to other progressive legislation the Biden administration may enact if Democrats retake control of Congress in 2024, as many expect. For example, Biden has said that he is in “favor of paying slavery reparations” if “studies found direct cash payments to be a viable option.” As the New York Times notes, reparations would cost trillions of dollars. Reparations advocates have recommended spending $10-$12 trillion. Biden’s infrastructure and Build Back Better plans would also add trillions of dollars in new federal government spending if either were enacted.
