Everyone understands that there are several factors that contribute to inflation in the United States. Dr. Joshua Robinson, a well-known lecturer at the University of Alabama, claims that the notion of stimulus checks is the primary cause of inflation in the United States.
This is due to the fact that the stimulus check idea was created to provide money directly to the hands of ordinary people in order to help them meet their bills during the COVID-19 outbreak.
Increasing inflation rate caused by the previous stimulus checks
In 2022, the inflation rate climbed by 7.5 percent over the previous year, with a total of $20 billion circulating in the US economy. The goal of stimulus checks, according to Robinson, was to address the economy’s severe downturn by delivering money to the people. However, the money was spent on services and commodities, causing product prices to progressively rise.
Furthermore, he stated that allowing people’s money to spend on products puts the entire country at risk of inflation. The Fed must, however, gradually loosen the restraints, as recklessness might lead to a recession. If the stimulus check idea is abruptly withdrawn, the country would experience a recession that will affect both the people and the economy, according to Digital Market News.
Despite the official statistic of 14 percent, the COVID-19 pandemic caused a jump in unemployment, which is already reaching 17 percent. Unemployment at this level is virtually the same as depression.
According to a UAB professor, the situation in the United States will normalize in a year. In general, inflation is described as a gradual rise in the prices of goods and services, resulting in a decline in the purchasing power of money.
Will new stimulus checks help Americans?
While the checks helped Americans for the past two years, inflation has continued to rise, and they are beginning to feel the squeeze. Initially, just 440,000 jobs were expected, as per Unica News.
Unemployment is at an all-time low of 3.8 percent. The rate has never been lower since the outbreak began.
A fourth check is unlikely due to the thriving job market and low unemployment rate. Inflation continues to have a big influence on Americans’ daily lives, despite the economy’s strength.
From food and gas to homes and rents, there is a larger demand for commodities than there is supply. Legislators are split because the economy does not need a fourth stimulus package, but people’s everyday lives do.
Read More:
Missing Stimulus Check: Here’s How To Ensure You’ll Get Your Unclaimed Payments
Truth About Child Tax Credit: Can You Still Get Stimulus Checks?