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Does Inflation Lead to Stimulus Payments in the United States?

U.S. inflation may have risen because of the stimulus check, according to some reports. Due to the outbreak of the COVID-19 pandemic, the federal government had released three rounds of stimulus checks before the brief shutdown of the economy.

A major emergency help package was passed by Congress after CNBC News reported that millions of people were suddenly without income.

“Economic impact payment” payments, referred to as “stimulus checks,” totalled between $600 and $1,400 per person in 2021. Stimulus checks had been used by the government previously, particularly during the financial crisis.

A senior fellow at the Urban-Brookings Tax Policy Center, Howard Gleckman, remarked that the government’s three rounds of stimulus cheques were “massively bigger.”

As a result, money was disbursed more quickly and efficiently by both the IRS and the U.S. Department of the Treasury. Gleckman praised the IRS for getting the stimulus payments out in a challenging situation.

Although the stimulus checks had several positive effects on the lives of those who were most in need, some claimed that the checks had a negative impact.

It was a major factor, according to Dr Joshua Robinson, an economist at UAB, that many people in the state of Alabama received stimulus cheques last year.

According to Robinson, to keep the economy from falling into recession, stimulus checks and recovery measures were required. According to Fox 19 News, he claimed that costs rose because people had more money to spend on the same things.

As an economics professor put it, there is a “trade-off” to this inflation everyone is currently experiencing.

He said that the federal government needs to pare spending, but it needs to do so gradually since doing so too soon may “really cause a recession.”


When the epidemic hit, Robinson estimated that the unemployment rate was 14 per cent. There were “almost statistics that might be labelled a depression,” he said, but it was actually closer to 17 per cent.

Expenditures Made With the Stimulus Fund

Most of the stimulus money went to lower- and middle-class families, with those earning less than $75,000 for single filers and more than $112,500 for heads of household getting none of it.

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The Peter G. Peterson Foundation found that married couples with joint incomes over $150,000 were also excluded.

Rather than saving or paying down current debt, roughly a quarter of American households used the first batch of stimulus funds to pay costs instead.

There was a difference between the second and third stimulus checks. Many families still use it to make payments on their monthly bills. According to one-fifth of households, the money saved or paid off debts was utilised instead.

According to Dr Joshua Robinson, an economist at UAB, the fact that many people in Alabama received stimulus checks last year was a key impact.

Stimulus checks and recovery measures, according to Robinson, were essential to protect the economy from going into recession. He argued that costs increased because consumers had more money to spend on the same products, according to Fox 19 News.

As one economics expert put it, there is a “trade-off” with the current inflation that everyone is experiencing.

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