The Atlantic: The Inflation Reduction Act has Unleashed “Uncapped” Spending on Climate Change

Essay by Eric Worrall

According to The Atlantic, the IRA costs are just estimates. For many items there are no limits on the magnitude of federal climate subsidies available.

The Climate Economy Is About to Explode

A new report suggests that the Inflation Reduction Act could be even bigger than Congress thinks.

By Robinson Meyer

Late last month, analysts at the investment bank Credit Suisse published a research note about America’s new climate law that went nearly unnoticed. The Inflation Reduction Act, the bank argued, is even more important than has been recognized so far: The IRA will “will have a profound effect across industries in the next decade and beyond” and could ultimately shape the direction of the American economy, …

The report made a few broad points in particular that are worth attending to: First, the IRA might spend twice as much as Congress thinks. Many of the IRA’s most important provisions, such as its incentives for electric vehicles and zero-carbon electricity, are “uncapped” tax credits. That means that as long as you meet their terms, the government will award them: There’s no budget or limit written into the law that restricts how much the government can spend. The widely cited figure for how much the IRA will spend to fight climate change—$374 billion—is in large part determined by the Congressional Budget Office’s estimate of how much those tax credits will get used.

But that estimate is wrong, the bank claims. In fact, so many people and businesses will use those tax credits that the IRA’s total spending is likely to be more than $800 billiondouble what the CBO projects.

Perhaps rosiest of all was the bank’s view of major risks to the IRA. The bill passed with not even a single Republican vote, but the bank concludes that the GOP is relatively unlikely to repeal the law, even if they take the White House in 2024. That’s because it would hurt their own voters most: “Republican-leaning states are likely to see the most investment, job, and economic benefits from the IRA,” the report claims.

Read more: https://www.theatlantic.com/science/archive/2022/10/inflation-reduction-act-climate-economy/671659/

With the US National Debt topping $31 trillion for the first time, a blank cheque for climate troughers is nothing to celebrate.

Renewable energy expenditure does not deliver value. All the “uncapped” federal subsidy money will achieve is enrichment for Chinese solar and wind turbine manufacturers and rare earth miners, enrichment for a handful of wealthy US corporatists, higher US interest rates, to contain the inflationary surge triggered by all that government money, more national debt, and no lasting benefit for the US economy.

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markl
October 6, 2022 2:05 pm

The only thing that’s going to be “unleashed” is the rush for subsidies.

H.R.
Reply to  markl
October 6, 2022 3:09 pm

Oh, heavens yes, markl.

The politicians’ stampede to get their snout in the $trough$ will make the Oklahoma Land Rush look like a Quaker prayer meeting.

oeman 50
Reply to  markl
October 7, 2022 7:11 am

Good one, Mark. The rush for subsidies is already unleashed. Companies are elbowing each other at the trough as they try to push their snouts in. Hydrogen in all colors, hydrogen hubs, CCS, etc., the Feds have opened the green hydrant so all can dance in the streets and bathe in its excess.

Chaswarnertoo
October 6, 2022 2:27 pm

Truly moronic.

tgasloli
October 6, 2022 2:30 pm

“…the GOP is relatively unlikely to repeal the law…”
IRA is as likely as Obamacare to be repealed.

lee riffee
Reply to  tgasloli
October 6, 2022 8:07 pm

And like Obamacare, all the IRA will do is to simply raise the prices of lots of things. Practically nothing the government ever touches gets cheaper or more efficient…hence the old saw about the “$500.00 toilet seat”.

Tom Halla
October 6, 2022 2:38 pm

The last thing Texas needs on it’s grid is more wind “power”, but the subsidy miners have too much influence.

Michael in Dublin
October 6, 2022 2:48 pm

Fraud on steroids.

Lark
Reply to  Michael in Dublin
October 6, 2022 10:02 pm

Government-mandated waste means graft for the ruling class.
They’ve never reached the upper limit, so now they think it’s 100%.
Also known as Build Back Better.

Zig Zag Wanderer
October 6, 2022 3:04 pm

$31 trillion debt? That has to be more than $100,000 per taxpayer. How long will that take to pay off?

Steve Case
Reply to  Zig Zag Wanderer
October 6, 2022 5:29 pm

“$31 trillion debt? … How long will that take to pay off?”
____________________________________________

The United States of America will either default on the loan or print money.

Graham
Reply to  Steve Case
October 6, 2022 8:57 pm

They will print money that then chases goods and services that are in demand so inflation takes off and most workers and those on fixed incomes become much poorer.
It can not end well for any country printing money .

RickWill
Reply to  Zig Zag Wanderer
October 6, 2022 5:48 pm

None of this debt matters because it is all denominated in USD that can be created from nothing at zero cost.

The only time it will matter is when China stops accepting US debt in exchange for stuff. I expect they are smart enough to realise that time is well before the USA reaches NutZero. Before then China will want real compensation in the form of US property.

Bruce Rouleau
Reply to  RickWill
October 6, 2022 7:05 pm

They are using our “Monopoly money” to buy real estate now.

Brad-DXT
Reply to  RickWill
October 6, 2022 7:47 pm

They’re already buying U.S. properties and companies.
Buy a ham lately?

KcTaz
Reply to  Brad-DXT
October 6, 2022 9:23 pm

Also, US farmland. Hmmm.

Last edited 1 month ago by KcTaz
Brad-DXT
Reply to  KcTaz
October 7, 2022 7:32 am

Farmland next to military installations. Hmmm.

AndyHce
Reply to  RickWill
October 6, 2022 9:08 pm

The word is that they are now using much of those $s to buy things of actual value, like real estate, farm lind, transportation, and power facilities.

Nick Graves
Reply to  AndyHce
October 7, 2022 12:28 am

Indeed; the rush of $ back to the USA is what is supporting its reserve currency status ATM.

That’s why it’s the last to enter freefall – excluding the Rubel & Yuan, of course.

KcTaz
Reply to  RickWill
October 6, 2022 9:23 pm

Rick, with all the shortages of material and goods these days, maybe we’ll get lucky and the Government will run out of paper to print more money and have to stop spending? That’s about the only thing I can see that will save us at this point.

John the Econ
Reply to  Zig Zag Wanderer
October 6, 2022 6:35 pm

It won’t be. They’ll just continue to print dollars, and the poorest will pay the most via inflation.

Rob_Dawg
Reply to  Zig Zag Wanderer
October 6, 2022 8:05 pm

$247,000 actually.

AndyHce
Reply to  Zig Zag Wanderer
October 6, 2022 9:05 pm

About as long as paying off a $50,000 personal dept when your income is $20,000 per year, your living expenses are $30,000 per year, and the dept interest is 10% compounded monthly,

Michael Jankowski
October 6, 2022 3:04 pm

That kind of spending appeases climate change activists for all of about 5 seconds.

KcTaz
Reply to  Michael Jankowski
October 6, 2022 7:14 pm

Michael, it has nothing to do with the activists, other than many are paid by NGOs who are the ones with the power, like Soros among others.
It is all about powerful, wealthy people and the politicians they buy implementing their designs for the world. It’s not like they’ve ever been shy about admitting their real goals, the destruction of civilization.

Climate Change Confusion: What Are We to Think?
https://bit.ly/3ydyULZ
5/25/21

* Maurice Strong, who organized the first U.N. Earth Climate Summit (1992) in Rio de Janeiro, Brazil:
“We may get to the point where the only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?”
* IPCC official Ottmar Edenhofer, November 2010:
“… one has to free oneself from the illusion that international climate policy is environmental policy. Instead, climate change policy is about how we redistribute de facto the world’s wealth …”
* Christiana Figueres, executive secretary of the U.N.’s Framework Convention on Climate Change, 2019:
“This is probably the most difficult task we have ever given ourselves: to intentionally transform the economic development model for the first time in human history.”
* Rep. Alexandria Ocasio-Cortez (D-N.Y.), February 2019:
“This is really about providing justice for communities … So, really the heart of the Green New Deal is about social justice.”

Davidf
Reply to  KcTaz
October 6, 2022 9:10 pm

The Climate Manifesto, is just the Communist Manifesto in Drag. No wonder the Left is so concerned with Trans rights!!

KcTaz
Reply to  Davidf
October 7, 2022 7:02 pm

So, true, David!

Bob
October 6, 2022 3:19 pm

It’s getting to the point where I think all subsidies need to be outlawed. They are causing far more harm than they are worth.

Jeff Alberts
Reply to  Eric Worrall
October 6, 2022 7:56 pm

Doing something that won’t help isn’t a good thing. Should have either did nothing, or given her a sandwich.

KcTaz
Reply to  Jeff Alberts
October 6, 2022 9:19 pm

Decades ago, I supervised emergency services for a major city’s Welfare agency. The police brought a drunk in and wanted me to figure out what to do with him. He, like many other alcoholics back then, lived in a cheap boarding house downtown.

Turned out he had a brother in town and I called him. I eventually talked the poor guy into coming and getting his brother–again it turned out because the brother had tried numerous times to help him. It always failed and the brother would move out and go back to drinking.

I still feel bad about getting the brother to take him in as I’m sure it ended the same as always but I felt worse when the guy asked me for money for “food” and I refused to give him money and bought him a sandwich, instead, and made him eat it.

He ate it reluctantly and promptly threw up on my feet. I was not a happy camper and the janitors who had to clean it up were not happy with me. That was a lesson learned and I never forgot it.

Reply to  Jeff Alberts
October 7, 2022 5:29 pm

Jeff & Eric,
Giving money mainly supports their drug habit.
Giving food is a much better option.
I keep a couple of cans of Vienna Sausages in the car to hand out to the guys & girls on the street corners. They open by a ring-top pull and have a 2025 use-by date. No can opener needed. I usually get a frown when I hand them the can then a big smile & “thanks!” when they recognize what it is.

Another perfect day here in central Arizona, all thanks to “climate change”. Lol

Bob
Reply to  Eric Worrall
October 6, 2022 8:06 pm

It’s a real problem and only getting worse. I don’t have the answer, either drugs or alcohol have completely taken them over, it’s sad.

KcTaz
Reply to  Eric Worrall
October 6, 2022 9:01 pm

Donate to a charity that helps these people, Eric. You just gave her more money for drugs. That doesn’t help her and it might help kill her.

TonyG
Reply to  Eric Worrall
October 7, 2022 10:59 am

Eric, in some (many?) cases they are the people government is “helping”. At least in some US states.

czechlist
October 6, 2022 4:21 pm

If the dims lose the Congress next month get ready for “You ain’t seen nuthin’ yet!” lame duck end of year spending

October 6, 2022 4:40 pm

Tax credits are not spending. They are actually loss of federal income. It is true that the actual amount is completely unpredictable, including being very low.

In particular the IRA tax credit rules for renewables could severely damage the industry instead of stimulating it and wouldn’t that be fun. I explain this here:
https://www.cfact.org/2022/08/23/renewables-subsidy-chaos-coming/

Louis Hunt
Reply to  David Wojick
October 6, 2022 5:11 pm

There is a difference between tax credits and tax deductions. Deductions reduce the tax you owe and are a loss of federal income. But credits can be given beyond what is owed. Therefore, they not only reduce federal income but also can become federal spending to pay those who owe no taxes or pay beyond the taxes owed.

Reply to  Louis Hunt
October 7, 2022 3:43 am

A lot of renewables credits are sold as well. Wish I had the numbers on this game!

observa
Reply to  David Wojick
October 6, 2022 5:28 pm

A very incisive analysis David and how lefties always mean well. Meanwhile here’s Xinhua having a chuckle at the climate changers-
Europe risks deindustrialization as soaring energy prices prompt corporate shutdown, exodus (msn.com)
Happy to exchange coal fired greenery for interest earning assets capitalist chumps. Come on over like Elon and bring your tech design and marketing skills with you.

Dave Fair
Reply to  David Wojick
October 6, 2022 6:07 pm

David, without going around looking for all the ins and outs, IIRC there are “Made In America” materials, components and assembly requirements. There may not be enough American made products to amount to much and costs could be astronomical. And a certain, increasing, amount of EVs must be made in North America.

Are you aware of any of this?

KcTaz
Reply to  Dave Fair
October 6, 2022 9:31 pm

“And a certain, increasing, amount of EVs must be made in North America.”

Dave, are you sure of that? As far as I know, Tesla is the only company manufacturing EVs in the US. Biden/Dems got an EV subsidy of $7500.00 passed and Ford promptly raised the price for their EVs by $8500.00, then, announced the EVs would be manufactured in Mexico.

Oh, wait, you said No. America. So how does manufacturing EVs in Canada or Mexico help US citizens who are paying for the subsidies? I really don’t get that.

Reply to  KcTaz
October 7, 2022 3:33 am

Not my topic but I think half the subsidy requires American materials for the battery and half for the battery made here, or something like that. Plus price limits. I have heard that no EV qualifies at this time.

RickWill
Reply to  David Wojick
October 6, 2022 6:13 pm

The subsidies in Australia are government endorsed theft from the poor to the less poor and wealthy.

Half of the solar panels on my roof are grid connected. I get paid 66c/kWh for the electricity exported. That money does not come from government, it comes from electricity consumers.

The Renewable Energy Target system in Australia is legalised theft and I am involved in the winning side of it as are about 8 million other Australians all with voting power. Only a handful of those 8 million realise they are screwing the poor.

The whole of Canberra (the seat of the Federal Government) has 100% “renewable” energy’. They are the only region in Australia this year that has had a reduction in electricity bills. No one there understands that they are screwing all electricity consumers in the rest of the country. They all believe they are on the right path. I expect most of the conservative politicians in Canberra believe that as well. They have their Canberra based staffers advising them how smart the Canberra power company was to lock in “renewable” contracts.

Few people grasp the Ponzi nature of “renewable” energy. I doubt they will even catch on if people freeze in the dark in Europe this year.

observa
Reply to  RickWill
October 6, 2022 8:10 pm

100% renewable electricity for Canberrans-
Advance (advanceaustralia.org.au)

RickWill
Reply to  observa
October 6, 2022 8:47 pm

That is a year old and they did have price increasers in 2021 while other locations were static or smaller increases. However, in 2022, the situation was different and they have been the only region with price reduction.

observa
Reply to  RickWill
October 6, 2022 9:29 pm

It’s like my 18+ year olds bragging they never drink and drive as there’s cheap public transport but they ring you up pissed at 3 am for a lift home. Perhaps the Opposition is about to have an adult discussion-
Peter Dutton says Labor’s renewable energy overhaul plan ‘never going to be realised’ | Peter Dutton | The Guardian

Timbo
Reply to  observa
October 7, 2022 2:30 am

I just listened to Nicola sturgeon in Scotland saying they were very nearly 100% renewable, how do they get away with continual lies?

Dave Andrews
Reply to  Timbo
October 7, 2022 7:15 am

Perhaps she meant that Scotland had so many wind farms (cut down 14m trees to accommodate them) that they could not put up any more. 🙂

Davidf
Reply to  RickWill
October 6, 2022 9:15 pm

Wrapped in their smug complacency.

High Treason
October 6, 2022 4:41 pm

The entire point about climate poverty as well as economic destruction from the scamdemic is to create insurmountable debt. When the time comes (the Great Reset) , that debt will be exchanged for equity- all assets. With universal poverty, it will be easy to enslave ALL of us.

RickWill
October 6, 2022 5:40 pm

enrichment for Chinese solar and wind turbine manufacturers and rare earth miners, 

China makes stuff and USA acquires it with a promise to pay. China is not being enriched. They are acquiring US debt.

The USD31bn is not the important number. The real concern is the USD16bn that the US owes the rest of the world:
https://www.bea.gov/news/2022/us-international-investment-position-2nd-quarter-2022

It actually reduced in the last quarter probably due to overseas gas sales and strengthening of the USD against other currencies.

The concern comes when China no longer accepts USA’s debt in return for the stuff needed to get on the journey to nowhere – NutZero.

KcTaz
October 6, 2022 7:03 pm

If all the subsidies, tax credits and Government support for all the companies involved in EVs, solar and wind were eliminated, climate change would stop being a problem the next day.

Here are wind’s rent-seekers- AWEA BOD: https://engage.awea.org/About-Us/Our-Board
“When all of the subsidies, loans, and loan guarantees given to the companies on AWEA’s board are counted, the grand total comes to a staggering $5.1 trillion…”
https://bit.ly/2FJPBXI

Two years ago, Berkshire’s CEO, Warren Buffett, explained why his companies are in the wind business. “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them,” he said. “They don’t make sense without the tax credit.”
At least, Buffet is honest.

DipChip
October 6, 2022 7:28 pm

Is the IRA like Manna from heaven for the shallow and indoctrinated mind?

KcTaz
October 6, 2022 9:40 pm

One wonders what got into The Atlantic to publish an article like this? Normally, they are a Democrat Party paper and, I’ve heard, they are what the Deep State and the Powers That Be on the Dem/Left use to introduce their next idiotic plans. Strange that they wrote this.

Lark
Reply to  KcTaz
October 6, 2022 10:14 pm

Did you not read the story?
They’re celebrating it, not complaining about it.
They believe* it’s going to mean green jobs, cheap energy and skittle-shi**ing unicorns.

*Believe for the usual Socialist definition of believe: they know that what they’re pretending won’t happen, but it will profit them and hurt their enemies under the banner of a glorious & beneficent Cause.

KcTaz
Reply to  Lark
October 7, 2022 7:07 pm

Thanks. I guess my rational mind missed their irrationality. I may have reached my limit of how much insanity I can process.

Coach Springer
October 7, 2022 6:43 am

On top of 2021’s American Rescue Plan for “COVID relief”. Our central IL city is installing solar panels at the city transit site with ARP funds. At the same time, they have entered into agreement to install solar panel roofs over the civic center parking lot at the expense of the subsidized solar companies. Looks like they bought the advertising hook, line and sinker.

So now we have a crumbling industrial city with solar panels at city government. Oh, wow.

Last edited 1 month ago by Coach Springer
Andy Pattullo
October 7, 2022 8:38 am

At last we’ve found that giant hole we were looking for where we can poor in all of our unneeded wealth, lets we accidentally use it to improve our world and quality of life.

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