People are demanding more stimulus checks, but Congress so far has been quiet on the demand. There could be many reasons why lawmakers aren’t focusing on stimulus checks, such as improving economic growth, a drop in unemployment and a focus on infrastructure bills. On Wednesday, President Joe Biden indirectly gave another reason why there may not be any more stimulus checks. This reason is the impact of coronavirus stimulus checks on inflation.
On Wednesday, Biden admitted that the inflation rate is at a three-decade high because people now have more money due to the $1.9 trillion stimulus package approved in March. This stimulus package gave up to $1,400 stimulus checks to Americans and expanded the child tax credit.
Biden said that the stimulus package approved in March is partly responsible for demand exceeding supply, resulting in record inflation, the highest rate of annual inflation since 1990. The Labor Department’s Consumer Price Index rose 6.2% in October year over year.
“The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,” Biden said. “It changes people’s lives. But what happens if there’s nothing to buy and you got more money to compete for getting [goods]? It creates a real problem.”
Further, the president noted that in addition to higher demand because “American families have been able to buy more products,” supplies are also “facing new disruptions.”
However, Biden hopes that inflation will drop as people start to go out.
“[People] are not going out to dinner and lunch and going to local bars because of COVID. So what are they doing? They’re staying home and ordering online and they’re buying product,” the president said.
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Inflation Could Get Worse?
Biden noted that more products are being delivered now because people now have a “little more breathing room.” Biden said that although it is a “good thing,” it also means more demand, and this, with supplies disruptions “is a recipe for delays and for higher prices.”
Biden said Americans are “feeling” the impact of inflation as well, adding that in “some parts of California, they’re paying $4.50 a gallon” for gas. Thus, the president says that is why it is important to “stabilize the supply chain.”
Many people believe that the inflation rate could get worse because Biden is working on infrastructure and social and environmental spending bills worth trillions of dollars. For instance, Democratic Sen. Joe Manchin recently tweeted that more government spending would increase inflation even more.
“By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse,” Manchin said in a tweet.