Peter Schiff Slams Inflation Reduction Act: 'Biden Knows Nothing About True State Of The Union'

Peter Schiff, chief economist and global strategist at Euro Pacific Capital, believes the Inflation Reduction Act will not do much in reining in price hikes but may, in turn, cause higher inflation.

"The only way the Inflation Reduction Act will reduce #inflation is if it’s repealed. The act will result in higher inflation, as the deficits generated to fund it reduce output in the private sector and cause the Federal Reserve to ultimately monetize the additional debt," Schiff tweeted.

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The Inflation Reduction Act enacts historic deficit reduction to fight inflation, lowers energy costs, increases cleaner production, and reduces carbon emissions by roughly 40% by 2030. It also allows Medicare to negotiate drug prices and caps out-of-pocket costs to $2,000.

Schiff's tweet comes in the wake of the State of the Union address by President Joe Biden he said inflation was a global problem due to the pandemic and the war in Ukraine, but the U.S. was better positioned than any other country.

"Tonight’s #SOTU address shows @Biden knows nothing about the true state of the union, which is now suffering under the weight of too much government. Biden’s speech was devoted to increasing that burden by saddling the economy with more spending, debt, regulations, and taxation," Schiff said in his tweet.

The economist also pointed out that the purpose of raising interest rates to fight inflation is not to slow the economy and raise unemployment but to reduce consumption and increase savings, which lifts capital investment and production.

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