The only way for the record profits was an increase in funds to spend at the corporations. There is no magic behind this. People had more money to chase fewer goods and companies were able to raise their prices.
Generally the way I suspect it goes is
1. Draw from savings to buy essential goods.
2. Slowly load whatever you can't afford on your credit cards.
3. Get new credit cards before you start missing payments.
4. Load more on your cards.
5. Have nowhere else to go so start taking payday loans.
6. Run out of money.
Which is in stark contrast to pre-2000s recessions where access to credit was far more limited.
As it is currently, if you've had a credit card, it is incredibly easy to get more and you can get an incredibly large amount of accessible credit. The average american has around 30k USD in available credit (10k for 18-22 and 20k for 23-38 but 30k overall) with only around 5k or less of that utilized on average. That's a lot of money that companies can draw on before consumers pockets are truly empty.
https://www.bankrate.com/finance/credit-cards/what-is-the-av...
More plausible to me is the idea that stimulus — printing new money by fiat — resulted in more cash in circulation. Corporations are like organisms that have evolved to capture and eat cash. They fed on the surplus cash, and their waistlines show it afterwards.
Meanwhile those of us with savings accounts pay the price when inflation reduces the buying power of the cash we had diligently set aside for future use.
Or you could just change your spending habits.
I guess you can blame me for not micromanaging every dollar I spend? But if I'm sitting in a drive thru grabbing a burger and fries and notice it's $5 more than it used to be, I'm probably still gonna buy the burger and fries. And I probably will still go grab one occasionally when I want it. Because saving $5 every so often isn't gonna really affect an activity that makes up a microscopic amount of my expenses (I've got fast food including coffee at 2.5% last I reviewed my data.)
But regardless I think what I'm describing is a real bit of human behavior at scale - and isn't that just economics at the end of the day?
$5 is $5... every penny counts.
Where are you getting this information? Raises are not keeping up with inflation. A few thousand in stimulus dollars years ago is not driving anything. PPP money didn't increase wages.
A few thousand dollars 2-3 years ago?
> Businesses
Payments that, at most, kept wages the same?
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People need to stop using "people are getting free money and that's raising inflation" excuse. Prices are rising and people are going into their savings or credit to keep spending. That's it.