Government Policies Lowering Energy Costs

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Government Policies Lowering Energy Costs

Table of Contents

Introduction
Discussion
Conclusion
References

Introduction

In the article Biden Administration to Provide Over $13 Billion in Aid to Help American Families Lower Energy Bills, Chelsea Cox reports on the governments efforts to assist citizens burdened by high electricity charges. The United States Department of Health and Human Services plans to release money to help low-income households pay for their power consumption. Another portion of the funding will go towards upgrading the homes of these low-income families to be more energy-efficient. By funding the energy assistance program, the Biden administration hopes to cushion citizens against rising energy costs and to grow the economy.

Discussion

According to the article, the government will spend over $13 billion in subsidizing electricity charges for citizens. Bidens administration will help lower energy bills for low-income households in two ways. Firstly, $4.5 billion will go towards the Low-Income Home Energy Assistance Program funding (Cox, 2022). Of this amount, $100 million will come from the Bipartisan Infrastructure Law, and $1 billion will be obtained through emergency funding that was placed earlier in the year (Cox, 2022). Secondly, approximately $9 billion will be used to help families make energy-efficient renovations to their homes. For instance, the program targets to weatherize 7000,000 homes and buy 500,000 heat pumps for 1.6 million families (Cox, 2022). In general, the amount spent as an aid to American homes to reduce energy costs is part of the Inflation Reduction Act.

The CNBC article illustrates how the government uses a social assistance program to help stabilize the economy. In recent months, US inflation has been rising steadily. This rate has been affected by factors such as increasing housing, medical, energy, and food prices. Without any intervention, citizens would be forced to spend a higher percentage of their income on these expenditures. However, Bidens Inflation Reduction Act seeks to prevent the current situation from getting worse (Cox, 2022). One way the Act will do this is through the proposed government expenditure to reduce energy bills.

However, not everyone thinks the administration should help low-income households meet their expenses. Some people argue that government aid makes people lazy and entitled (Nicaud, 2022). These opponents say that such funds should go towards other responsibilities that would grow the economy. For instance, Nicaud (2021) argues that handouts lead to economic stagnation because money moves from taxpayers to the government to the recipients of aid without any exchange of goods or services. He writes that no economic activity occurs since welfare does not generate transactions. However, this assertion is misinformed since government welfare programs and even government handouts cushion people against tough economic times. Without these fiscal policies, the increasing energy costs would curtail the ability of citizens to spend on other sectors, thereby depressing the economy further. Thus, government funding of social aid programs helps to reduce inflation, thus stabilizing the economy.

Conclusion

In conclusion, I chose the CNBC article by Cox since it aptly summarizes a government intervention meant to lower inflation. The inflation rate has been on a steady increase since early this year for numerous reasons, including the mounting cost of energy, especially as we approach winter. It is a relief to know that President Bidens administration prioritizes inflation reduction as a way of growing the economy. However, I wished the article had mentioned when these changes are expected to take place. The government can make elaborate promises, but it is only after the policies are implemented that we will find out whether they were helpful or not.

References

Cox, C. (2022). Biden administration to provide over $13 billion in aid to help American families lower energy bills. CNBC.

Nicaud, M. (2021). Government handouts continue to stagnate economic outputs. Mississippi Center for Public policy.

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