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US Inflation Reduction Act - US in hurry to drive growth in green industries

Graham Watson

27th April 2023

The USA has pivoted towards the green economy, with a particular focus on old manufacturing areas, with a significant expansion of public spending and public support for the green economy and US infrastructure, as well as looking to develop as a domestic computer chip industry.

It's thrown down the gauntlet to the EU and the UK, with the former having responded, and the UK, well...waiting...

The US Inflation Reduction Act of 2022 (IRA) is a landmark United States federal law which aims to curb inflation by reducing the deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy. It was passed by the 117th United States Congress and signed into law by President Joe Biden on August 16, 2022. It is a budget reconciliation bill sponsored by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV).

The IRA contains a number of provisions, including:

  • Reducing the deficit: The IRA includes a number of measures to reduce the deficit, including raising taxes on corporations and wealthy individuals, and cutting spending on defense and other programs.
  • Lowering prescription drug prices: The IRA allows Medicare to negotiate for prescription drug prices, which is expected to save consumers billions of dollars each year.
  • Investing in domestic energy production: The IRA invests billions of dollars in domestic energy production, including clean energy sources such as solar and wind power.
  • Promoting clean energy: The IRA promotes clean energy by extending tax credits for renewable energy and investing in research and development.

The IRA is a significant piece of legislation that is expected to have a major impact on the US economy. It is too early to say definitively what the impact of the IRA will be, but it is likely to lead to lower inflation, lower prescription drug prices, and increased investment in clean energy.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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