Horowitz: Why any debt ceiling deal must include repeal of last year’s $1.2 trillion green energy bill

Not all spending and not all policies are equally destructive, but some are more harmful to our liberty than others. In the realm of options for which spending cuts Republicans should demand in exchange for raising the debt limit, one policy stands out as a winner. The so-called “Inflation Reduction Act,” which we now know will cost $1.2 trillion, has not fully taken root in the economy yet, but if it does, it will transform our society into an energy-free dystopia, boxing out the middle class from living the American dream.

Goldman Sachs recently estimated that the cost of the green energy bonanza will actually be $1.2 trillion, three times the estimate of the Congressional Budget Office when the bill passed Congress last year. But it’s not even the fiscal cost that is the biggest problem. We’d be better off flushing that money down the toilet rather than using it to essentially kill the American automobile and dot every corner of this country with electric vehicle charging stations and infrastructure. This bill is designed to flood our market with electric vehicles, drain an already weak electric grid with expensive vehicles that can’t make it on a full road trip without a recharge, strip the world of precious resources, and ensure that we are all living in 15-minute cities, owning nothing, and eating bugs.

There are many good proposals for structural and spending reforms, but this proposal pre-empts a grifting menace that is not yet embedded in society, unites all Republicans, has a large price tag, and addresses the engine of our economy and lifeblood of our freedom – not to mention our safety.

On that latter point, recall what happened when the government made a similar “investment” in the COVID shots. Whenever you have government monopolizing the public square to demand that people buy a certain product, subsidize it indefinitely, and shame and even ban alternatives, you get a product that is shielded from all market forces that would tend to make it safe and effective. In that respect, pumping hundreds of billions of dollars into the electric vehicle dystopia will create a myriad of safety concerns that a free market would never otherwise sustain.

We are just beginning to see the consequences of powering cars with sensitive batteries – consequences that were overcome not through ingenuity but through government picking winners and losers in the market. During hurricanes and floods, electric cars suddenly catch on fire. They are also extremely hard to repair, and even minor damage can total the car. There are also concerns of spontaneous explosions. According to insurance industry officials, premiums for electric cars are going up because so many cars with few miles on them can get totaled after a minor accident or a scratch.

"We're buying electric cars for sustainability reasons," said Matthew Avery, research director at automotive risk intelligence company Thatcham Research, in an interview with Reuters. "But an EV isn't very sustainable if you've got to throw the battery away after a minor collision."

So not only does it cost more money to produce a battery, more carbon dioxide to manufacture one, and more money to operate one, but insurance premiums will skyrocket.

More details from Reuters:

It already costs more to insure most EVs than traditional cars.

According to online brokerage Policygenius, the average U.S. monthly EV insurance payment in 2023 is $206, 27% more than for a combustion-engine model.

According to Bankrate, an online publisher of financial content, U.S. insurers know that "if even a minor accident results in damage to the battery pack ... the cost to replace this key component may exceed $15,000."

In other words, electric vehicles are so uneconomical and so counterintuitive to the times we live in, given the issues with electricity rates (thanks to other green fascist policies), scarcity of resources, and skyrocketing prices, that even a minimum free market would ensure this idea never gets off the ground. However, if the electric car subsidy bill is allowed to stand, it will continue to float this unsustainable policy in a temporarily tenable way by floating $1 trillion worth of subsidies for development, purchase, and maintenance of EVs.

As the Wall Street Journal editorial board observed, the Biden Inflation Reduction Act made EV production too big to fail by ensuring that even if the companies lose money, they can afford to discount the cars and benefit “directly or indirectly, from subsidies up and down the EV supply, production and service chain: battery production, sales to consumers, charging stations and more.” Which is why Ford can afford to “invest” in a $3.5 billion electric battery plant in Michigan. It’s a classic case of venture socialism, whereby the taxpayer floats the capital and incurs the risk while the consumer is forced to suffer the consequences in safety, efficiency, and cost.

Meanwhile, the government is boxing out all competition by essentially banning gas-powered vehicles in some states, telegraphing their demise through an array of policies and government-induced monopolies of the public square, and immediately making them prohibitively costly for middle-income Americans to live the American dream. According to Kelley Blue Book owner Cox Automotive, the average monthly payment on a new car reached $777, nearly double the level from just four years ago. “The idea of a new car in every American’s driveway is not the world we live in,” said Charlie Chesbrough, a senior economist at Cox, in a recent interview with Bloomberg.

Add the electric car agenda to the wind and solar scheme, and you have a nuclear bomb on the lifeblood of the economy, the engine of prosperity, and the lynchpin to the American dream being within reach of most citizens. That cost is incalculable even relative to the $1.2 price-tag of the IRA.

So rather than focusing on a demand for across-the-board spending cuts or a specific top-line spending level, Republicans should focus their demands on the quality of the spending cuts in targeting the weaponization of the government against the American dream. Ending the global warming albatross around the necks of working-class Americans should be the top target. And ironically, it would truly lead to the reduction of inflation.