One of the largest transfers of money in history was the $1.9 trillion American Rescue Plan. The bill funded $1 trillion for Treasury programmes, $700 billion of which was transferred from government coffers into citizens’ checking accounts in the first six months after President Biden signed the bill into law.
It includes more than $450 billion in direct payments to people and households, including:
Economic Impact Payments totaling more than $400 billion were distributed to 170 million people. More than 106 million Child Tax Credit (CTC) payments totaling $46 billion have been made. More than a million payments totaling more than $5 billion in Emergency Rental Assistance
Keep in mind that this does not include the $240 billion in relief and stimulus funds provided by the Treasury to state, territorial, local, and tribal governments. Of course, such a large effort and spending would have to have an equally massive impact on the economy as a whole.
The stimulus boosted an economy that was already on the mend.
According to the US Treasury, there was a burst of economic activity in the six months after President Biden’s signature of the American Rescue Plan, which was both directly and indirectly induced by the stimulus.
In the last three months of the first half of 2021, the Treasury reported that 3 million jobs had been generated, with employment creation averaging 765,000.
The Treasury indicated that business-support stimulus initiatives were responsible for much of the growth, rather than direct cash handouts. The Employee Retention Tax Credit, in particular, provided firms with up to $28,000 per employee in order to avoid costly employee turnover.
All of the money went into two very unbalanced streams, and prices skyrocketed.
The billions of dollars in cheques and direct deposits provided unprecedented spending power to millions of Americans.
As 2021 draws to a close, the tsunami of consumer demand drove prices to increase throughout the spring and summer — and that same inflation is still a thorn.|
The epidemic compelled a huge shift away from the purchasing of face-to-face services but towards the purchase of physical products.
Despite millions of vaccinations delivered across the country, according to the Economic Policy Institute, that dynamic did not change — at least not enough — when the checks started arriving in March.
As billions of dollars flowed into the goods sector, demand soared, driving up prices and putting a strain on the shipping and logistical systems that serve it.
This pressure slowed global supply lines to a halt, sending prices further higher and putting an end to any hopes of inflation being a blip on the radar.