Americans have faced difficulty making ends meet for months due to rising inflation. And they owe more to cover the high cost of living. Total debt for households topped $16 trillion in the second quarter of this year, as per the Federal Reserve Bank of New York’s Center for Microeconomic Data. While a big amount of that came from mortgage loans, usual consumers also increased balances for their credit cards. Particularly, credit card balances saw an increase of $46Bn in the second quarter of 2022.
Many Americans have become tired of savings when job losses were not damaged in the first days of dissemination. And now they have no choice other than to increase their debt for credit cards to cover the higher costs. As inflation affects many, many states have taken steps to provide stimulus checks and rebates to help residents cope with rising bills. However, there is no such incentive support plan from the federal government. And it’s not really a negative thing.
No More Stimulus Check Rounds Will Help Now
A lot of Americans are asking lawmakers to issue money along with stimulus checks so those fighting the bill can catch up. In practice, however, the stimulus measures may not help the inflation problem at all. Problems can get much worse. A major reason why the cost of living is so high right now is that Americans suffered a bit of a windfall when the supply chain went down last year.
Not only did the U.S. bailout in March pass a $1,400 stimulus check, but the measure also increased the tax credit for children, increasing the maximum amount and paying half the credit in installments delivered per month. This gave Americans access to cash during a period when supplies were tight. This caused demand to far outstrips supply, driving up prices. If a new stimulus package is launched now, it will serve to widen the gap between supply and demand. And that can lead to skyrocketing costs most months