The federal administration sent millions of stimulus checks during the difficult period of the pandemic to Americans, and it helped many stave off starvation and homelessness. Around 11.7M Americans were helped out of scarcity as the poverty rate slid from a high of 11.8% to a more manageable 9.1%, according to reports from the US Census Bureau.
The stimulus check came at the right time as unemployment rates were as high as 14.7%. it is easy to forget the relief that it brought to countless homes as people were forced to make so difficult choices to keep food on the table. For many, it was a choice between foregoing a meal or giving up on essential medicines.
Most Americans would have defaulted on their loans if the federal administration had not immediately placed a moratorium on bank recovery.
But multiple negative consequences have outweighed any benefits of the stimulus checks. This is especially true of the stimulus checks that were given out in December 2021 and January 2022.
Research by the non-profit, SF Fed said that the successive stimulus checks may have contributed to inflation in the US by as much as 3%.
Stimulus Check Updates: Failed The Inflation By As Much As 3%
The inflation was undoubtedly fueled by the supply chain gap, the rise in gasoline prices, plus the war in Europe. Inflation has been outpacing the growth in wages at a fast pace for some time now. It is making it tougher for low-income citizens to survive on a stagnating income, especially those who benefited from the stimulus checks.
While wages increased by only 5.6% over last year, inflation peaked at its highest at 8.5% in March this year. The inflation was fuelled by the increase in the demand for goods, which was triggered by the multiple stimulus check money in the hands of Americans.
That, coupled with the reduction in the supply of numerous essentials, from food grains to beef, exacerbated the inflation problem for many citizens.