There’s no free lunch. Inflation was up above 6% and people saw their buying power drop by 8%. That’s about it right there.
Focusing only on pandemic stimulus misses the big picture.
Either way, injecting money into the economy at this scale creates significant inflation. This inflation reduces inflation-adjusted incomes. It doesn’t matter all that much if it’s going to people or businesses, it’s going to cause inflation.
It's only reflecting the relative shift of the country.
You reach your hand down to lift someone up, and shock and horror, you are no longer above them.
You’ve got it backwards. Assets tend to track inflation. Rich people do just fine. Wages do not. Poor people suffer the brunt of it. Inflation increases the inequality.
Which does precious little for the economy, so there's bo economic reasoning for doing this. If you want an economic stimulus, give money to poor people instead.
this drop was mostly caused by inflation
"Real median household income fell by 2.3% from $76,330 in 2021 to $74,580 in 2022. Income estimates are expressed in real or 2022 dollars to reflect changes in the cost of living. Between 2021 and 2022, inflation rose 7.8%; this is the largest annual increase in the cost-of-living adjustment since 1981."
Inflation didn't even appear in the article, unless I'm blind.
"After tax" just tells us specifically what's being measured.
https://www.census.gov/content/dam/Census/library/publicatio...
Which makes sense, as afaik most pandemic-era stimulus was absolute dollars instead of income-relative.
Consequently, you see a huge % impact there as it was given and then withdrawn.
"Our analysis of the relative importance of supply-side versus demand-side factors finds 60 percent of U.S. inflation over the 2019-21 period was due to the jump in demand for goods while 40 percent owed to supply-side issues that magnified the impact of this higher demand."
I've always found it interesting that econ discourse usually takes such a rigid view for the causes of phenomenon, if this were another quantitative discipline I imagine there'd be a softer position. Anywho, just chiming in to opine that the models for economics folks argue about is likely more nuanced than portrayed.
The disruptions caused by all those pandemic related restaurant closings drastically altered the Agricultural supply chain economy of scale as farmers were forced to discard all that food/dairy production for lack of any functioning restaurant industry to purchase that production. And the Trucking/Shipping interests in that Agricultural supply chains losing all that business and having layoffs there and some interests going out of business as the result and Independent Truckers finding work in other market goods transportation/shipping if they could at that time.
So just measure the time it will take to reestablish a longer term Agricultural products supply chain economy of scale and that's a good part of the reason that food prices remain higher to this day regardless of the supply of money in the economy!
Except that only a portion of the inflation may have been caused by all that money. Or have you forgotten the geopolitical events that caused a spike in food (grain) prices and especially energy costs?
Let's not forget about supply chain issues:
* https://www.frbsf.org/economic-research/publications/economi...
* https://www.frbsf.org/economic-research/indicators-data/supp...
On the flip side we don't have high unemployed that takes over a decade to slowly go down (like Obama had to deal with post-2008 because the GOP didn't want to spend). Biden was there for the long slog to get people working again.
Yes, inflation was high for ~18 months: would have a not-hot economy be better or worse than that?
Folks with no or little economics education have no concept of supply driven inflation, which is exactly what you get when a pandemic cripples global JIT supply chains.