The United States is suffering from a constant rise in the inflation rate which is resulting in families gradually losing their power to purchase things. The average prices have increased to 8.5 % as compared to the previous year including the price of gas and oil after America authorized several sanctions against Russia, the leading producer of oil. As per the data from the Bureau of Labor Statistics, the index of gasoline has increased by 18.3% along with all the major items in the market.
Does Stimulus Check Have The Ability To Stabilize The Economy?
The rise in the price of gas is increasing the cost of transportation which results in companies increasing the price of their final products. However, in the market, the rise in inflation is not having an impact on all the products in the same amount. There was even a fall in the Consumer Price Index by 0.4% after the food items and energy were taken out from the calculated average.
In order to tackle the problem of inflation, the Federal Reserve decided to increase the rate of interest. There are some economists who believe that instead of giving stimulus check payments, the Government can reduce the tax levied on middle to lower-class families.
The balance can be maintained by charging huge taxes on monopoly businesses like technology, pharmaceutical, oil, and other giant corporate businesses that are incurring huge profits even in the pandemic era. An important tax return policy can also help the families for a short time span while the prices of necessary items are rising every day.
Even though the rise in prices has occurred by 8%, still the wages of employees have increased only by 4.5% from the previous year. The policy of stimulus check has given some relief to the eligible citizens of America. However, it is true that even in this hard time, there are thousands of people who still did not get their stimulus check payment which would have laid off some burden from their shoulders.