MILLIONS of Americans in more than half a dozen states will receive direct payments sometime this month.
Alaska has approved an immediate payment of $3,200 for Sept. 20, a combination of energy relief and the state’s permanent dividend.
In Pennsylvania, homeowners can claim up to $1,658 in property tax credits by the end of the year, with some checks going out this summer.
Hawaii and Virginia send their residents tax credits that depend on their income and tax liability.
Illinois will also issue a tax credit on Sept. 12, sending individuals $50 earning less than $200,000, joint filers $100, and families up to $300.
Meanwhile, Colorado residents receive checks for $750 and $1,500 for couples because of the state’s leftover revenue.
Finally, the frontline workers in Minnesota who have applied for direct payments are expected to receive their checks after the state announces the official amount.
Read our stimulus live blog for the latest news and updates…
How the Inflation Reduction Act Can Lower Energy Bills
The Senate passed the Inflation Reduction Act on Sunday, which includes several initiatives from health care to tax relief.
An important part of this law includes tax credits and rebates for energy-efficient homeowners.
Those who opt for efficient heat pumps or alternative energies (solar and electric) will receive a tax benefit or a discount check, reports Market Watch.
The bill has yet to be passed by the House, but it is expected to happen because of the Democratic majority who helped advocate for this bill.
What is being done about inflation?
To keep inflation in check, the Federal Reserve has raised interest rates four times this year.
More tariff increases are expected in 2022, despite the historic increases in the first half of this year.
In March, the rates were increased by a quarter of a percentage point.
On May 4, the rates were increased by half a percentage point.
In both June and July, the Fed raised interest rates by three-quarters of a point, pushing the Federal Funds rate up from 0.25 in January to a target range of 2.25 to 2.5% now.
What is the current inflation?
The US Bureau of Labor Statistics released the latest inflation figures on Aug. 10.
The consumer price index (CPI) rose to 8.5% in July compared to a year ago.
Earlier, the US Bureau of Labor Statistics said inflation rose to a staggering 9.1% in June.
Some economists claim that stimulus measures do not cause inflation
Economists continue to debate whether stimulus is the cause of record inflation.
Vice columnist Edward Ongwesso Jr. argues that corporate greed is to blame for inflation, not stimulus.
Economist Hal Singer told Ongwesso that “the biggest price increases in 2021 tended to come from the most concentrated industries in 2020.”
Economists and policy analysts continue to debate the relevance of stimulus measures to inflation levels.
Harvard research shows that stimulus can lead to inflation
A study conducted by Harvard and the University of Exeter suggested, according to the Wall Street Journal, that pandemic stimulus may not have helped lower-income Americans and instead contributed to inflation.
A randomized study conducted from July 2020 to May 2021 showed that one-time payments led to increased spending for just a few weeks, the outlet reported.
These payments allowed people to spend more for a short period of time, which can lead to inflation.
Link between stimulus measures and inflation
While stimulus measures have increased consumer spending in 2020 and 2021, other experts have noted that inflation is a global problem and occurs in countries that have not sent stimulus measures.
Josh Bivens, research director at the left-wing Economic Policy Institute, told NPR that corporate profits contributed to price increases at least as much as the stimulus.
There has been an acceleration in core inflation in every advanced economy, even those that have brought very, very little fiscal relief,” he said.
“And so I think the evidence linking specific Biden-era policies to the rise in inflation is just very, very weak.”
Stimulus controls fueling inflation?
Some say that handing out incentive checks to help consumers deal with rising costs isn’t the best strategy, according to Digital Market News.
Inflation is fueled by free money that does not create goods or services.
The stimulus measures from the federal and state governments in response to the epidemic and the Fed’s monetary easing have all played a part in the current scenario.
According to the U.S. Department of Health and Human Services, government efforts have lifted 11 million Americans out of poverty during the epidemic.
On the other hand, according to the Federal Reserve Bank of San Francisco, stimulus payments increased U.S. inflation by nearly 3 percent by the end of 2021.