Three Economic Indicators Show Inflation Reduction Act Falling Short

Paul Dykewicz

Three economic indicators show the Inflation Reduction Act ballyhooed by the Biden administration is failing to live up to its name one year after it was signed into law by the president in August 2022.


President Biden has been speaking positively about his economic policies to drum up support for his leadership amid flagging popularity in political polls but the latest reports about inflation, mortgage rates and prices are showing little relief for budget-stretched consumers. I side-stepped partisan politics when commenting on Friday, Aug. 18, on EWTN to focus on how the data did not back President Biden’s boasts about the benefits of the Inflation Reduction Act.

EWTN News Anchor Tracy Sabol Interviews Columnist Paul Dykewicz about the economy.


President Biden signed the Inflation Reduction Act into law but, even though the name calls for reducing inflation, prices instead have increased for housing, food and many other expenses that especially fall heavily upon those of modest means who may not have a fixed-rate mortgage. One indicator of the legislation’s true intent may have been signaled about a year ago on August 16, 2022, when the White House announced the new law one of the “most significant” acts Congress has taken on clean energy and climate change in the nation’s history.

Three Economic Indicators Show Inflation Reduction Act: Biden’s Boasts

In a statement released by the White House on that date, it boldly claimed President Biden redefined American leadership to confront an “existential threat” to the climate and set forth a new era of innovation and ingenuity to cut consumer costs and drive the global clean energy economy forward. However, the latest Consumer Price Index clearly shows prices still rising.

In July, the Consumer Price Index (CPI) for All Urban Consumers increased 0.2%, seasonally adjusted, and rose 3.2% over the last 12 months, when not seasonally adjusted. The index for all items — less food and energy — increased 0.2% in July when seasonally adjusted, up 4.7% for the past year when not seasonally adjusted, according to the U.S. Bureau of Labor Statistics. The CPI measures average change over time for the prices paid by urban consumers for a market basket of consumer goods and services.

“The Fed’s tight money policy is having its effect,” wrote Mark Skousen, Ph.D., in his latest Forecast & Strategies investment newsletter hotline. “Interest rates are rising sharply, with the yield on the benchmark 10-year Treasury topping 4.25%, the highest it has been in 15 years. And the 30-year mortgage rate is now over 7%.”

The most recent rates show 30-year mortgage now at or above 8%.

Mark Skousen, head of Forecasts Strategies and scion of Ben Franklin, talks to Paul Dykewicz.

“We don’t want Treasury yields to collapse, as that’d signal a hard economic landing,” said Jim Woods, leader of the Intelligence Report investment newsletter. But a drift lower, especially in the 10-year Treasury Note, would help support the market multiple and make the argument for a 20X valuation (up from the current 19X) more viable. This could come from either [Chairman] Powell confirming that the Fed is done with rate hikes at the upcoming Jackson Hole Economic Policy Symposium [Aug. 24-26], or in-line economic data and a continued decline in inflation readings.”

Paul Dykewicz interviews Jim Woods, who heads Intelligence Report.

Three Economic Indicators Show Inflation Reduction Act: Cluttered with Clean Energy

The White House guidebook for the Inflation Reduction Act provides a detailed overview of the clean energy and climate mitigation, agriculture, and conservation-related investment programs. It further identifies eligibility to apply for funding and for what activities. A quick glance puts the emphasis on government funding of projects, not ways to curb inflation, stem price increases and stop runaway mortgage rates.

Former Republican presidential candidate and media mogul Steve Forbes, who I interviewed last month at the FreedomFest conference, recently said the “green energy” projects funded by President Biden are “expensive” and “not good for the environment.” Especially for those who are skeptical of his views, you can click this video link to hear his reasoning.

Three Economic Indicators Show Inflation Reduction Act: Mortgage Rates

Mortgage rates in the United States are at a level not seen in over 20 years, a stark difference from a couple of years ago when families were refinancing to lock in low rates, according to a recent note from BofA Global Research. In the United States, refinancing rose to $2.6 trillion in 2020-2021 when the Fed lowered interest rates to zero. The number of U.S. homeowners without a mortgage today is near 40% and among those who aren’t so lucky, 85% are on a fixed-rate mortgage.

“For these households, the debt burden remains unchanged during a hiking cycle, only impacting those with either a floating rate mortgage or a home purchased after rates went up,” BofA wrote. “This makes the Fed’s policy tool somewhat of a blunt instrument, potentially requiring higher rates and/or holding rates higher for longer. However, the other side of the coin of a less powerful monetary policy is that consumer spending seems resilient on the back of strong employment and a tight housing market.”

Forbes accused the Biden administration of spending hundreds of billions of dollars on “schemes” to replace fossil fuels with renewable energy sources. For instance, Forbes said one wind turbine requires the use of 2,500 tons of concrete that goes 30 feet deep into the ground.

“Imagine trying to reclaim that land,” Forbes said.

Three Economic Indicators Show Inflation Reduction Act: Wind Power Whipsaw

The wind turbine also requires 900 tons of steel and 45 tons of unrecyclable plastic, Forbes continued. To operate the wind turbine, it requires 700 gallons of costly synthetic lubricants that are vulnerable to spills, since they must be replaced each year, he added.

Solar and wind farms need “gargantuan” amounts of land, Forbes said. For example, New York City occupies 205,000 acres of land, but it would require 2,000,000 acres of land to fuel the Big Apple solely with renewable energy.

A 100-megawatt gas-fired turbine is about the size of a residential house and would provide electricity for 75,000 homes, Forbes counseled. To provide equivalent energy to the same number of homes, 20 wind turbines would occupy 10 square miles of land.

“Renewables are very expensive,” Forbes continued. “Cost overruns here are as common as they are at the Pentagon.”

Wind farms are “notorious bird killers,” degrade existing transmission lines and displace wildlife, Forbes warned. Plus, what should be done with the 1,000-pound batteries in electric vehicles that require replacement with no recycling of the worn-out ones? he asked rhetorically.

Renewables also require an immense amount of mining for minerals. To replace fossil fuels, a 40-fold increase would be required in lithium, Forbes said.

These matters warrant substantive discussion and analysis, Forbes advised. Without it, the result will be bad environmental results and record-breaking waste of federal money, he added.

The data show that there is far more to fighting inflation than coming up with a name to slap on a new federal law. High inflation, rising mortgage rates, increasing prices and indicate the Biden’s policies need revamping to deliver what he has been promising but not providing. Add in the rising political risk due to Russia’s unrelenting war in Ukraine, and the economic indicators show some unsettling times ahead.

Paul Dykewicz,, is an award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at and He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.

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