After the American economy managed to recover from the throes of the pandemic, the economy in 2022 has again come to crossroads- which would be an incentive for a stimulus check payment. As it stands, massive stimulus packages were already passed by Congress back in 2020 and 2021- which helped the country come out of a deep recession, and even a depression of sorts.
However, this influx of capital to individuals and businesses has also increased the rate of inflation. The problem the policymakers face currently is whether the addition of money in the pockets of the Americans will actually drive the rate of inflation, or if it will help them cope better with the rising costs.
Stimulus Check Payments Could Help People During Inflation
Now, while one can debate the amount of the American Rescue Plan, a sum of $5 trillion released into the economy as stimulus check payments has had a tremendous impact on rising inflation. According to the Federal Reserve Bank of San Francisco, the stimulus payments do seem to have quite a quantifiable effect of adding around 3% to the inflation rate of the country by the end of 2021.
Most of the bank balances in the country did soar quite impressively as the stimulus check payments were being distributed- and they are still pretty higher than they were in their pre-pandemic levels, as mentioned by both the JPMorgan Chase Institute as well as the Washington Post. This does suggest that any form of additional stimulus payments wouldn’t really go to basic needs as much as discretionary purchases- which could definitely drive prices higher.
One of the clearest arguments in favor of issuing stimulus check payments will be coming from actual data that has been recorded by the US Department of Health and Human services- which did find that government action during the heart of the pandemic kept around 11 million Americans straight out of poverty.