Back when he was running for President in 2020, Joe Biden declared that “Milton Friedman isn’t running the show anymore.” With inflation currently around the 9% mark, I’d say that was a fairly accurate statement.

Friedman, you will recall, instructed us that, “inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” And that, of course, is predominantly a function of excessive government spending, financed by increasing the quantity of money. Which also explains the current near-universal occurrence of inflation — pretty much every government on the planet racked up its spending during the COVID pandemic, generally without reducing money available for private spending, i.e., through taxing or public borrowing.

The monetary provenance of inflation is about as solid and immutable an economic principle as you can find, as is its corollary — that the cure for inflation is to reduce the supply of money. And yet, politicians cannot seem to wean themselves off the fantasy that there is a fiscal magic wand. And so we get things like the “Inflation Reduction Act of 2022.”

The shamelessly named bill is the result of the usually more clear-eyed Sen. Joe Manchin’s deal made with Senate Majority Leader Chuck Schumer, to get “something” passed from the carcass of the “Build Back Better” madness, and could end up being one of at least two early Christmas gifts the Democrats — including Colorado’s Sen. Michael Bennet — give to Republicans this fall.

The Manchin-Schumer bill does, in fairness, reduce its spending provisions from insane levels to merely irresponsible; but still allocates billions of public dollars to a laundry list of distortionary machinations masquerading as climate salvations. But the main feature of the bill is the tax increase, the 15% Alternative Corporate Minimum Tax, alternately referred to as “book minimum tax”. This is a tax applied to companies’ earnings as reported on their financial statements, as opposed to what they owe under existing rules. It taxes accelerated depreciation — in other words, it is a tax on investment, targeting businesses whose taxable income is lower than their book profits due to up-front expensing of investment costs. It doesn’t require the economic prowess of Milton Friedman to predict the impact that will have on investment.

The timing couldn’t be much worse; the nation’s economy just reported two consecutive quarters of contraction, traditionally the signal that we are poised to enter a recession. Dissuading investment is not likely to encourage maintenance, let alone growth, meaning we can in all likelihood start adding unemployment to the bitter economic brew that we are simmering in.

The usual schtick is being applied here; that this is simply a tax on “the rich.” That wouldn’t make it any more economically palatable in any case, but as the central planners need to keep being reminded, corporations don’t pay taxes. That burden falls on workers, shareholders and ultimately consumers. The Congressional Joint Committee on Taxation gets it — their analysis of the bill found that it will increase the average tax rates for just about every bracket next year.

One could take initial solace in the fact that the Schumer-Manchin bill doesn’t include the Global Intangible Low-Taxed Income (GILTI) tax on foreign earnings included in the original monstrosity… but wait! Turns out that the 15% book minimum tax in Schumer-Manchin could be applied on top of the 15% global minimum corporate tax proposed by the Organization for Economic Cooperation and Development. The OECD tax is structured differently from the book minimum tax, meaning that France, for instance, could decide that it’s different enough to justify imposing the OECD tax on an American business operating there, which is already paying the Schumer-Manchin tax. Would it not be unreasonable for that business to ask, why not just relocate to France?

I mentioned two election gifts the Democrats could be handing Republicans. The second? Well, take your pick really, but remember that while we are fighting over the Build Back Better redux, there is still the equally economically illiterate issue of eliminating student loan debt as though by magic. The current foolish bout of student-debt forgiveness is set to expire on Aug. 31, but President Biden is seriously considering re-extending the moratorium.

This is ridiculous on so many levels: it’s illegal to begin with, as the President doesn’t have the authority to unilaterally cancel those debts; it’s economically ludicrous — pouring money into the demand side of the economic equation may not cause inflation, but it certainly exacerbates it; and it’s patently unfair, to transfer debt from those who incurred it onto those who did not, especially considering those who incurred it are by definition pretty well set-up for future success.

Sen. Bennet is up for reelection, and faces the most formidable opponent he has ever had to go against, in the toughest political year he has ever confronted, as the nation is pummeled with record inflation and looming recession — and his party hands him a tax increase on everybody and a bailout for the best-positioned. If they keep this up, Joe O’Dea may well be writing Messr’s Biden, Schumer, and Manchin thank-you notes come November for their shortsightedness.

Kelly Sloan is a political and public affairs consultant and a recovering journalist based in Denver.