ICYMI: Economists on BBT Press Call Discuss Positive Economic Impact of Inflation Reduction Act Inbox

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WASHINGTON, D.C. — Yesterday, economists Alan Blinder, Joseph Stiglitz, and Kim Clausing joined a press call hosted by Building Back Together to discuss the positive economic impact of the Inflation Reduction Act of 2022, a key priority for President Biden.

Dr. Alan Blinder served as Vice Chair of the Federal Reserve and was a member of President Bill Clinton’s Council of Economic Advisers, Dr. Joseph Stiglitz is a Nobel Laureate and a former Chair of President Bill Clinton’s Council of Economic Advisers, and Dr. Kimberly Clausing serves as Chair in Tax Law and Policy at the UCLA School of Law.

Earlier this week, Blinder, Stiglitz, and Clausing – along with 123 other economists, including seven Nobel Prize winners, three former chairs of the Council of Economic Advisers, two former Treasury Secretaries, and dozens of former economists from various administrations – signed a letter urging Congress to pass the Inflation Reduction Act. On the call, the economists reiterated this message and highlighted the historic nature of this legislation, including its investments in clean energy, lowering health care and prescription drug costs, and closing tax loopholes to ensure the ultra wealthy and large corporations pay their fair share.

Key Moments:

Stiglitz on the Inflation Reduction Act Lowering Inflationary Pressure: “What is very clear is that this should lower inflationary expectations, both through the macroeconomic effects that all of us have emphasized in terms of the net deficit reduction…but also through the micro economic measures on both energy and healthcare, which are really, really important.”

Blinder Calling on Congress to Pass the Inflation Reduction Act “Expeditiously”: “When I heard the news of the Schumer-Manchin compromise. I was both shocked and completely elated…It’s a very good bill…So that’s what I mean by trifecta: climate, prescription drugs and the budget deficit all wrapped into one package which I hope the Congress will pass expeditiously.”

Clausing on the Inflation Reduction Act Cutting the Deficit: “I think this is a really important step forward, the Inflation Reduction Act, for two really essential reasons. First is macroeconomic, like the title of the legislation says inflation is a concern. And if you look at this legislation, it is on net, a deficit reducing piece of legislation and that is a very difficult thing for Congress to do…So I think Congress is to be applauded for moving in this direction.”

Stiglitz on the Inflation Reduction Act bringing down health care costs: “One of the major concerns of Americans is health care costs…And that’s because we have higher prescription drugs, higher health care costs…So this is a major achievement. Let’s not underestimate how important this is, and it also addresses some of the issues of accessibility, affordability of Obamacare insurance.”

Stiglitz on the Inflation Reduction Act Lowering Energy Costs: “We know that the cost of renewable energies are a fraction of the cost of what we’re paying today for fossil fuel. So this is a measure that increases both security of energy but also will lower the price.”

Stiglitz on the Inflation Reduction Act Closing Loopholes and Ensuring Large Corporations Pay Their Fair Share: “The fact that we are putting forward this, the corporate minimum tax, and combining that with closing loopholes and some very important loopholes, making our tax system fair, something that we’ve been working on advocating for a very long time finally happening.

Blinder on the Long Fight to Lower Prescription Drug Prices Now Included in the Inflation Reduction Act: “It has something I’ve been arguing for since 1993. I think Joe will remember this, in the Hillarycare debates in the Clinton administration for Medicare negotiating prescription drug prices. I mean, it’s not an accident that American-made drugs, also foreign made drugs, but we’re talking here American-made drugs, are cheaper in France and England and Germany and so on than they are here. And it’s because those countries’ health systems negotiate lower prices, and we don’t do that. We should have been doing it back in 1993, as I said, and then 2003 and 2013. It looks like it’s finally going to come to fruition. And that’s great.”

Stiglitz on the Inflation Reduction Act Ensuring Tax Cheats Are Held Accountable: It’s really important to have what is viewed to be a fair tax system. And very wealthy people are, quite frankly, using very expensive lawyers to avoid paying taxes. And having a system which enforces adaptive taxes, a system that makes everybody pay their fair share, that means that just because you have a good lawyer you can’t escape taxation, is really important. So it’s not only that these small investments will yield large returns. They create a fairer tax system. And a fairer tax system is really important for a fairer society.”

Clausing on the Inflation Reduction Act Easing Inflationary Pressure: “And when you look at those provisions along with the health provisions, you’ll see both of those also have microeconomic effects of lowering prices on to goods that have become very expensive for Americans with health insurance, and medication being very expensive part of people’s consumption bundles, but also with energy being particularly expensive of late. So that also has a microeconomic effect of lowering price pressures.”

Blinder on the Inflation Reduction Act’s Investments Fighting Climate Change: “It makes a significant downpayment on the things we need to do to address the climate change crisis before it’s too late, if indeed it’s not too late already, and I want to put the emphasis on the word significant…This is not trivial by any means. This is a very substantial effort to do something about what really is the great existential crisis of our time, which has been much ignored here for much too long.”