Since the start of the pandemic, the Federal Government sent an unprecedented amount of stimulus payments to American citizens, including three rounds of stimulus checks over the course of two presidential administrations. Two years after the first payments, the United States is dealing with the most significant inflation in decades.
Is the stimulus the reason for the inflation? That’s been a point of contention among economists, as well as other experts. Some have called for additional stimulus checks for, ironically, helping consumers deal with inflation.
“The trade-off is we have placed ourselves at risk for this inflation that we are now seeing,” Joshua Robinson, a professor of economics at the University of Alabama at Birmingham, told WBMA last month. “Now, the Fed has to pull the reins back a little bit. But they have to do so very slowly because if they do this too quickly, they could actually cause a recession.”
There have not been any additional stimulus checks, at least at the federal level, since the American Rescue Plan Act in the spring of 2021. Fear about inflation has also been a reason for refusing to extend other major spending, such as the expanded child tax credit.
Moreover, at least one political figure who was pushing for direct payments before most others says he’s still for continued stimulus. Andrew Yang ran for president in 2020 and later for mayor of New York City in 2021 on a platform of universal basic income (UBI.). Yang said this week in an interview with CNBC that he doesn’t believe stimulus checks are to blame for inflation, and he wants the government to send people cash.
Yang noted in the interview that only about 17 percent of the money in the 2020 CARES Act went to stimulus checks. “Where did the other 83% of the money go? It went to institutions. It went to pipes,” Yang said in the interview.
“Money in people’s hands for a couple of months last year — in my mind — was a very, very minor factor, in that most of that money has long since been spent and yet you see inflation continue to rise,” the former candidate added. He instead blamed inflation, for the most part, on other factors. “Everyone is concerned about inflation. I’m concerned about the fact that it’s making a lot of Americans’ lives miserable, because it’s a very difficult circumstance when your expenses are climbing, and maybe your income isn’t keeping pace,” Yang said in the interview, which took place at a Bitcoin conference in Miami. However, he added that he thinks inflation will lead to increased interest in cryptocurrency.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.