Stimulus checks in 2020 and 2021 prevented the U.S. from entering a recession or maybe even a depression. Though due to the inflow in capital going to both people and businesses, inflation has risen.
Now lawmakers are facing a dilemma, as Yahoo puts it. They have to determine if more direct relief will present somewhat of a chance of rising inflation even more or if it could help the U.S. curb inflation.
Stimulus checks and the 3% trillion in relief allegedly have contributed 3% in inflation by the end of 2021.
The direct relief helped the bank accounts of millions of Americans. If more relief is spent heavily on “discretionary purchases” this might make costs rise, according to Yahoo.
According to data from the U.S. Department of Health and Human Services, found relief from the government prevented 11 million Americans from out of poverty. HHS reported, “The most impactful programs for alleviating poverty were economic impact payments under the ARP (American Rescue Plan) and unemployment compensation.”
Elaine Maag Talks About The Round Of Stimulus Checks
Elaine Maag, who’s a Tax Policy Center a senior research fellow, said another round of stimulus checks most likely won’t happen, but acknowledged it would help individuals deal with rising inflation.
“Delivering some sort of cash benefit now would sort of protect them from the inflation that’s happening around them,” Maag told Changing America.
Former presidential candidate Andrew Yang said stimulus checks aren’t to blame for inflation and that he’s definitely pro-direct relief.
“Where did the other 83% of the money go? It went to institutions. It went to pipes,” Yang told CNBC.
While there are no substantial plans for more federal-level direct relief anytime soon, many states have provided direct relief of their own, in the meantime.