U.S. Economy: Inflation Reduction Act

Joe’s Betting on America.

All told the Inflation Reduction Act may spur $1.7trn in public and private investment, reckons Credit Suisse, a bank. The spending unleashed by it, the CHIPS Act and the infrastructure bill are “among the most significant investments that we’ve ever made”, Janet Yellen, the treasury secretary, declared last year.

“In recent decades the focus became very narrow,” Ms Yellen explains to The Economist. For the past year she has been touting an alternative vision, which she calls “modern supply-side economics”. It emphasizes the beneficial effects of public investment—in training, social services, clean energy and the manufacture of certain goods. This agenda cleverly weds the aim of succoring mfg to several other goals, including reducing America’s emissions of greenhouse gases, limiting its dependence on imports of strategic goods and shoring up its technological lead over China.


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