In March 2021, President Joe Biden signed a bill into law that included a $1,400 stimulus check for eligible Americans, the third such check granted by the US government since the start of the Covid-19 epidemic. In November, Biden’s $2 trillion infrastructure measure was enacted.
Stimulus Checks Will Drive Up The Inflation Rates
However, after failing to pass his Build Back Better social spending plan, the president is anticipated to press Congress to pass help for US households in 2022.
As the price of gasoline increases, politicians are searching for a fast answer to alleviate the agony that pump drivers are suffering.
The invasion of Ukraine by Russia, as well as the economic sanctions imposed, will not improve the situation. As a method of delivering stimulus checks to consumers, lawmakers have recommended suspending the gas tax.
The Tax Foundation’s Alex Muresianu thinks it’s a bad idea. The tax revenue is used to pay for highway repairs and is an efficient funding source because those who use the roads are the ones who pay for them.
The removal of the tax results in a financing shortage, increasing the cost of repairs in the long run. Not to mention that it would operate as a mini-stimulus check, causing extra inflationary pressure in the economy. In December 2021, the national job vacancies rate was 6.8%.
Inflation is at levels not seen in 40 years, and businesses are blaming increased salaries for the rise in costs. Economic statistics suggest an increase in the cost of products due to shortages and corporations padding their profit margins.
When compared to services, the price of commodities is growing by a ratio of three. In less labor-intensive industries, inflation has been greater. Increased supply chain costs have been the cause of inflation, which corporations are passing on to customers while earnings are higher than before the epidemic.