How did the stimulus checks cause high inflation if the average tax refund is 2 to 3 times that...

How did the stimulus checks cause high inflation if the average tax refund is 2 to 3 times that amount every year? We were doing just fine like that for years. But suddenly inflation exploded over 1.4 thousand?!

 

The free trillions to the wealthy via the PPP loan forgiveness programs did it.

 

Tax refunds are money the government took from people as pre-payment of income tax. Stimulus checks are money the government prints in their money minting factories and gives out free for votes.

 

When people and companies work to produce services and products and in return they receive paychecks and profits from consumers, the free market stays intact and inflation is kept in check. But when money is produced without any associated service or product, inflation is inevitable.

Now, concerning the OP... tax refunds are a return of money that was already earned from producing a product or service. The government "money for nothing" is what caused the inflation - regardless of whether it went to the rich or the poor, or both. The money supply increased without an associated increase of goods and services.

 

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Wasn't just the stimulus checks. Do some research.

 

Well that's too bad. I actually enjoyed the financial aid that the government gave to business.

 

The difference is that your tax refund is earned money. The stimulus was unearned money that was inserted into the economy.

 

If any US policy has been the main cause this inflation, then why is inflation a big and bigger problem in countries with no US policy in place? Here is a chart of the rate of increase of inflation over a year-and-a-half for various countries...



SOURCE


And the actual inflation rate by country.

 

I don't think anyone is claiming the stimulus checks were the main cause of inflation. Though they did contribute to inflation, since that is not something normal that happens. But it could also be said, in a sort of way, that tax refunds contribute to inflation too. (But of course we all know there is a very obvious reason for tax refunds)

I don't think your argument is a good one. I see that you're just trying to put the size of the stimulus checks in perspective, so that part of your argument could be valid.

 

That sounds like another very stupid question.

Um, maybe because they have policies even worse than the U.S.

What exactly was the point of your question? I don't see it.

Remember, those European countries overreacted to the coronavirus pandemic too and decided to print lots of money to pay for it.

 

Well that may be true for some but people sure know how to game that earned income tax credit to et back way more than they ever paid in.

 

Yes. Tax returns aren't hot money. They represent an equivalent amount of produced goods and services, so when the consumer has that money and spends it, there is a corresponding amount of goods and services in the national pool.

Biden and the Dems have been pushing what is essentially Magic Money Theory (MMT) that when the government wants something they can simply print the money and obtain it. AOC claims this is how the Green New Deal could be paid for. Now humans have been coining money for at least 8,000 yrs and these nincompoops actually seem to think that they are the first ones to think of this, confirming in their own minds that they are visionary geniuses. And she graduated with honors, from Boston U, a decent college, with a degree in economics! Just to give you a sense how stupid a college graduate with high grades can be, even in their major. Like what the holy hell are they teaching? She has no understanding of runaway hyperinflation?

So here is what happened. We have been dealing with deflationary forces, to some extent, since the GFC, there is a certain amount of hot money that you can get away with, to offset deflationary forces, and if the folks pumping the hot money remember the old adage: "Pigs get fed, Hogs get slaughtered" they can pull off some hot money, as long as they are satisfied with being pigs and don't become hogs.

Then along came COVID and the right amount of hot money offset the deflationary forces, but then Dems thought "Gee that looks like fun!" This MMT actually works! And they did two things that compounded and lit the whole damn thing on fire. First they sent another round of stimulus out when what was needed was folks to return to work so they they could produce the goods and services that would match the draw of goods and services that money would represent.

Then they had another evil thought: "How about if we use extended unemployment benefits as means of funding a general strike against US business to force them to bring up wages?" Joe, who thinks that business is conducted the way his global bribery empire is conducted, is all about force and leverage and seems himself a major player, all this 'The Big Guy" has swelled his thoughtless head. He creepy whisper-voiced this "explaining" how this would result in higher real wages. He's a crap-pile of stupid. He has no concept that money represents goods and services and that if you supply money while workers sit at home not producing goods and services, that shortages develop and the rot of inflation takes the whole damn thing down.

He still doesn't. They just passed another near $Trillion in graft, which the Fed will likely have to put a good portion on their balance sheet, which creates more hot money and he is still doing essentially nothing to increase the production of goods and services, the lack of which is the fundamental cause of inflation.

You want rising real wages, you need a rising pool of goods and services and robust demand. That works every single time, but, you'll never get it while the Carbon Cult controls the Democrat Party. They are fine with the Gentry living in luxury, but, they think that "the masses" need to live in corresponding austerity to "pay for it". The folks behind this don't like you, and think the world would be better off if there are far fewer of you and that the remaining had a much lower standard of living.

And, to some extent they are accomplishing this:

Americans Are Dipping Into Savings To Weather Bidenflation.

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"36 percent of Americans have drawn an average of $617 from their savings to pay their bills, the company found. Nearly 90 percent of those surveyed expressed anxiety that a recession is approaching, and roughly a third reported being "uncertain" or "anxious" about their personal finances. Respondents cited monthly bills, health care costs, grocery prices, and gas prices as their areas of greatest financial concern."

85 days until the next election. These entitled clowns need our feedback.

 

Businesses being paid to shut their doors, not producing, causing a backup in production followed by a surge in demand when the shutdown ended.

Also trillions were spent elsewhere and put in circulation via other methods.