Inflation is hitting people hard when they go to the grocery store and fill up their gas tanks. The recently passed federal Inflation Reduction Act attempts to do just that but will it really do so? ABC 31 News’ Joel Massey has more.
Ty, inflation is affecting everyone here especially when it comes to food prices. All over the country food prices are outpacing overall inflation. According to the Consumer Price Index, grocery store food purchases rose to more than 12 percent compared with last year at this time. Today I spoke with some shoppers on how it’s hitting their pocketbooks.
Terry Butler, Alexandria resident said, “The food and the gas cost and the cost of living is making it very hard. I know it would be better under Trump, because Trump is more manageable he’s got a better mind and he knows how to handle things.”
Tina Sawyer said, “I’m a retired educator as well as my husband and we’re pretty able to handle it right now but there are a lot of people that are not as fortunate as we are that it is hitting them really hard and I’m really worried about our economy and our country.”
“Do you think the inflation reduction act will actually reduce inflation?”
“No, I think it’s going to increase taxes on the people where it hurts the most.”
August 16 President Biden signed the 740-billion-dollar Inflation Reduction Act but according to a study put out by the Wharton Business School at the University of Pennsylvania the act would have no meaningful effect on inflation in the near term and only reduce inflation by 0.1 inflation points by the middle of the first decade. The white house says that it will lower prescription drug and health care costs. There is also a lot in the bill on funding clean energy like solar panels, wind turbines grid-scale battery plants—projects not directly related to inflation.
Deborah Randolph president of the Central Louisiana Chamber of Commerce said the act increases the minimum book tax which will hurt businesses.
“Our problem with that including here in Central Louisiana probably about 15 percent of that tax is going to fall on manufacturers so that’s of great concern to us because we have a nice base of manufacturers here in central Louisiana.”
Randolph says that the Act also has implications for the job market.
“Certainly there can be a ripple effect on raising taxes on business and industry but it could mainly choke their ability to grow to add employees to ratchet up operations to expand.”
In the Act there are sweeping provisions that push the country toward green alternative energy.
“But one of them is actually beneficial to us here in central Louisiana and that is that there are incentives for carbon capture facilities and of course Cleco headquartered here in Central Louisiana is building a carbon capture facility up at Boyce.”
But we’re not there yet. Jerry Cripps the manager of Mac’s Fresh Market in Alexandria says that fossil fuels are still playing a role in price increases.
Cripps said, “Everything’s going up and a lot of it has to do with the price of gas these companies that transport all our food and stuff they’re not going to absorb all that cost so they have to pass it on to the consumers.”
Specifically, the price of eggs and ground beef have gone up. The price of ground beef is 25 percent higher than it was the last six months and eggs have increased 50 percent over the last year.
“Even though gas prices have risen and they’ve started to drop a little bit they’re not going to drop the prices of food because they’ve already set their price on it so they’re not going to come down on it,” said Cripps
Experts say all economic indicators point to a recession on the horizon, but some say we are already in a recession because the typical definition is two consecutive quarters of lower gross domestic product which we have had.