Another Round Of Stimulus Checks Can Help Cope With Inflation

stimulus check
stimulus check

As Americans feel the effects of inflation on their wallets, several experts have questioned whether or not handing out additional stimulus cheques is the right solution. If trillions of dollars are going to be distributed to millions of Americans in 2020 and 2021, what role may inflation play in 2022?

After an estimated $5 trillion was spent in 2021 to battle the COVID-19 epidemic, inflation in the United States was expected to have risen to above 3% by the end of 2022. Yahoo reported in March that consumer prices rose by 8.5%, the highest rise since 1981.

Further Stimulus Checks Might Drive Prices Higher

In 2022, the economy is at a crossroads after a roaring recovery in 2021 when the United States escaped from the lockdowns caused by the epidemic.

The United States avoided a severe recession or depression thanks in large part to the massive stimulus check packages approved by Congress in 2020 and 2021. The inflation rate, however, was supported by the infusion of cash to firms and people.

Whether or if giving Americans more spending power would increase inflation is a conundrum authorities must now address. Here we will examine the views of many experts on the topic, as well as the state-level discussions and approvals of lesser stimulus check payouts.

Although the exact impact of the $5 trillion injected further into the American economy even during the epidemic is debatable, there is little question that it contributed to the upward trend in inflation. Prices in the United States have continued to rise since the end of 2021 when the Federal Reserve Bank of San Francisco estimates that stimulus payments contributed almost 3% to the inflation rate there.

It is possible that this means any further stimulus check money will not be spent on necessities but rather on wants, which might lead to even higher prices.