In March 2021, President Joe Biden signed a bill providing for 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 signed into law.
Stimulus checks will push up inflation rates
However, after failing to pass his Build Back Better social spending plan, the president is expected to lobby Congress to pass aid for American households in 2022.
As gas prices rise, politicians are looking for a quick response to ease the agony pump drivers are suffering.
The invasion of Ukraine by Russiaas 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 gasoline tax.
Alex Muresianu of the Tax Foundation thinks this is a bad idea. Tax revenue is used to pay for highway repairs and is an effective source of funding because it is those who use the roads who pay for them.
Removing the tax leads to a lack of funding, increasing the cost of repairs in the long run. Not to mention that it would work as a mini stimulus check, causing additional inflationary pressure in the economy. In December 2021, the national vacancy rate was 6.8%.
Inflation is at levels not seen in 40 years and companies blame rising wages for rising costs. Economic statistics suggest an increase in the cost of products due to shortages and companies inflating their profit margins.
Compared to services, the price of raw materials increases in a ratio of three. In less labour-intensive industries, inflation was higher. Rising supply chain costs have been the cause of inflation, which companies are passing on to customers amid higher revenues than before the outbreak.