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Sunday, November 27, 2022

Federal Report Reveals Inflation Could Force Households Shell Out $8,581 More In 12 months: California Stimulus Check Soon, Other States Too Mull Relief Measures

The effect of the pandemic continues to linger as the record inflation has established a vice-like grip on prices and refuses to budge from its high perch.  A report by the Joint Economic Committee of the US Congress has revealed that the price rise has been steeper than earlier anticipated, particularly for low and moderate-income households. The absence of federal stimulus checks has forced more states to join in support of residents.

The present economic situation appears to be drifting steadily towards the situation that prevailed immediately following the pandemic. Before the series of federal stimulus checks rescued them from certain poverty, credit default, and homelessness.

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For the first time, many families faced the prospect of zero income. This was especially alarming as millions in America live paycheck to paycheck. And within weeks many were staring at the prospect of a zero bank balance and mounds of unpaid bills.

The successive stimulus check saved them from the ignominy of total penury and helped them put food on the table, pay their pending bills, clear their home rent and mortgage payments, and even save a part of the stimulus check amount.

The indirect support by the federal government to businesses, and other organizations like hospitals and schools, and the generous sum sent to states, and local and tribal governments helped stave off an economic collapse.

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Businesses were able to afford wages and could retain workers throughout the pandemic despite reporting a total loss of demand for goods and services. Some sectors like restaurants and tourism would take months to recover and the support during the initial period proved crucial to their survival.

The Economic Committee report has cited that Americans will have to pay close to an extra $8,500 plus in the next twelve months as this rate of inflation is expected to persist and continue into the next year.

While prices of food items remain high, it is the prices of gasoline that have brought to its knees a nation that is heavily dependent on cars for their everyday needs.

Stimulus Check
Stimulus Checks

This is particularly hard for families as close to 55% of Americans had an annual income that was less than $50,000. And the pandemic ensured that it was way less than that in 2020.

The federal stimulus checks and the parallel support measures such as the extended unemployment payments and the enhanced Child Tax Credit stimulus checks ensured that people had it way better in 2020 and 2021 than earlier anticipated.

But even as the inflation rate crept past the 8% mark, all federal support dried up, largely due to Republican intransigence in both the federal chambers. With the midterms approaching, they turned it into a political issue linking the high inflation rate to the third stimulus check, part of the American Rescue Plan Act signed by President Biden in March 2021.

Many states have come around to the fact that rising prices have been detrimental to the financial situation of the majority of Americans. And they are helping out their residents with federal funds.

It is ARPA funds that have come to the rescue of both Republican and Democratic-ruled states as they use those funds to finance the state inflation relief measures.

Around 21 states have moved in with stimulus checks that will help Americans tide over the immediate financial crisis triggered by the record inflation rate, the highest since November 1981.

California Stimulus Check To Go Out In October

California has initiated the biggest state relief measures to deal with the effect of the high inflation rate. the Golden State is giving out its third round of stimulus checks and the first to help out residents affected by the record pandemic.

With Gasoline prices, the most affected, California is particularly hit hard as the prices here are the highest in the country and crossed the $6.38 a gallon mark a week ago.

Under such circumstances, the California Middle-Class Cash Back becomes more crucial to prevent people from going under as they almost did just after the pandemic. At that time they had the federal stimulus check support system to see them through the crucial months of the total shutdown and the economic recession that followed immediately after.

But the recession was brief and was followed by a boom in the economy that led to a large-scale return of the workforce as jobs opened up. The successive stimulus checks also ensured that the economy stayed on an even keel. But things turned awry after the Republicans decided to stop any further payments with an eye on the midterms. They tried to link the stimulus check to the high inflation figures.

California has been termed the Middle-Class Cash Back that will cover even the middle class with an adjusted gross income of up to $500,000.

The lowest slab has been retained at $75,000 for individuals and $150,000 for married couples filing jointly. An individual stimulus check of $350 will go out for each filer plus another $350 for one dependent. So a family in this tax slap can expect to earn $1,050 if they declare a dependent. An individual in this income range can expect a maximum of $700.

Stimulus check
stimulus check

Individuals earning between $75,001 and $125,000 and $150,001 and $225,000 the individual amount comes to $250 plus another $250 for one dependent. An individual with earnings between $$150,000 and $250,000 can expect a $200 check plus another for a dependent. Married couples can earn between $400 and $600 if they report one dependent.

The relief plan also concludes that some people are hurting more than others. The relief package has other measures including $1.1 billion in aid for recipients of Supplemental Social Works.

Even as the legislators passed that placeholder budget next earlier this month, differences remained over spending plans including expenses for educational institutions, as well as the leading climate package.

The Governor had earlier called for a plan to send a $400 debit gas card to residents with families getting a maximum of two. But democratic legislators convinced Newsom to go for a bigger stimulus check that would solve the current issue.

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