Inflation Reduction Act

Throughout the history of the United States, inflation has been a common problem. Inflation is a general increase in prices and fall in the purchasing power of money. Over the past decades, inflation has been around 3-4% annually; however, during the last year, the average inflation rate has shot up to 8.5%. This has led to many problems such as the recent stock market crash, raised costs of living, gas prices rising, and much more. Overall, the rising inflation has affected America’s economy enormously. Federal Reserve has therefore taken action to raise interest rates in order to combat inflation. In addition, the Inflation Reduction Act which was recently signed (Aug 16, 2022) is designed to create clean energy jobs, make the tax code fairer, revitalize American manufacturing, and lower the healthcare costs. This legislation lowers drug costs, healthcare costs, and energy costs, fighting climate change and taxing wealthy corporations. Furthermore, this act is meant to create good paying new jobs across the country, lower the deficit, and ask the ultra wealthy corporations to pay their fair share. With inflation affecting our economy for too long, the government has taken steps to lower the inflation rates through interest rate hike and new legislations. In the coming days and months, we will learn whether these steps will create the desired effect.