Former presidential candidate Andrew Yang believes Covid stimulus checks aren’t to blame for the recent inflation increase, and he’s still in favor of handing out free money to workers to protect them from economic shocks and technological upheaval.
On the sidelines of the Bitcoin Miami conference, the universal basic income (UBI) evangelist told CNBC that stimulus checks make up “maybe 17 percent” of the money issued under the CARES Act, a bill passed by Congress to unlock trillions of dollars in stimulus funding to help the economy recover amid global lockdowns.
“What happened to the other 83 percent of the money?” It was distributed to several institutions. It went to pipes,” said Yang, who ran for mayor of New York City and president of the United States on a ticket calling for the government to provide guaranteed monthly payments to all people aged 18 to 64, with no strings attached.
“Money in people’s hands for a couple of months last year was a very, very minor factor in my mind, in that most of that money has long since been spent, and yet you see inflation continue to rise,” Yang said, adding that before the pandemic and Economic Impact Payments, the primary drivers of inflation were staples like education, health care, and housing, all of which were independent of stimulus checks.
In March, consumer prices increased by 8.5 percent, the highest level since 1981 in the United States. According to Yang, inflation is mainly due to a lack of goods, resulting in pent-up demand.
“Inflation is a major problem for everyone.” “I’m afraid that it’s making many Americans’ lives unhappy because it’s a tough situation when your expenses are rising, and your income isn’t keeping up,” Yang said, adding that web3 is the most significant change to combat poverty.
Some argue that bitcoin can be used to hedge against inflation because the dollar’s purchasing value is eroding.
“I believe that interest in bitcoin will rise as individuals seek other methods of storing value,” Yang predicted. “People understand that if you merely have a bank account full of money, it’s losing value right now unless you’re getting paid above the rate of inflation, which is currently at 7%,” Yang added.
“Savings accounts were still only paying 1 percent or 2 percent when I looked,” says the author.
Where Bitcoin and Universal Basic Income Collide
According to Yang, cryptocurrencies such as bitcoin aren’t only an inflation hedge. They might also be able to assist him in realizing his grand goal of a widespread UBI implementation.
“The intersection is very significant,” Yang explained, “because if you’re trying to get buying power into people’s hands, one tool to do so is the U.S. dollar, and I ran for president on making that case, but there’s no reason why it has to be in U.S. dollars as opposed to bitcoin or some other asset class or currency.” He believes that new currencies will emerge from the government sector.
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“You might have towns and localities experimenting with local currencies to help drive people to local small businesses and organizations who aren’t getting the assistance they need now,” he added.