Soaring Gas Prices Are Harming Americans. It’s Time for More Stimulus Checks | Alaska

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Inflation is affecting every sector of the economy. At the end of January, the annual rate of inflation reached 7.5 percent, the highest level since 1982. Gas costs, in particular, are increasing rapidly, reaching $4.25 a gallon on Wednesday, up from around $2.86 in March. This implies that filling a 20-gallon tank currently costs $85, up from $57.20 at this time last year.

According to a recent research by Moody’s Analytics, inflation costs the average household an additional $276 each month, or over $1,100 per quarter. And, given the volatility in oil prices as a result of Russia’s invasion of Ukraine, it would not be shocking if those expenses rose to more than $300 per month. Many Americans, particularly low- and moderate-income households, are unable to handle such quick price rises.

Regrettably, the federal government has few measures available to directly assist people in coping with rising gasoline prices and general inflation. The administration might establish a new programme to assist low-income families in paying for high gasoline prices, hike interest rates to slow the economy, boost pressure on OPEC nations to increase petroleum production, and identify measures to mitigate supply chain disruptions. While all of these measures would be beneficial, they would take time to make their way through the economy and halt inflation’s increase. Families require assistance immediately.

 

Gas Tax AND stimulus

 

The quickest and most efficient approach to shield disadvantaged citizens from the effects of global economic instability is to make a direct payment through the IRS, similar to the three stimulus cheques distributed to families during the pandemic’s peak. These payments aided low- and moderate-income households during times of school closures and layoffs.

However, unlike stimulus cheques, these payments should go directly to low- and moderate-income households, defined as those earning less than 80% of the national median income. This way, payments are sent to individuals in most need while also keeping the program’s overall cost low.

What Russia’s invasion of Ukraine may signify for the economic recovery in the United States

The administration should request authorization from Congress for a payment of $1,100 per household to cover four months of higher prices in the future, with the option for the president to provide a second or even third check to low- and moderate-income families for an additional four months if prices remain high. We have no idea when this crisis will end or when vital commodities and services will revert to more affordable levels.

 

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While the US government strives to contain inflation over the long term through monetary policy and removing supply-side limitations, this boost will assist low- and moderate-income families in the short term in meeting basic needs. And for those afraid that extra stimulus checks may increase inflation, consider the perspective of a parent attempting to provide food and medicine for their children, as well as gasoline to get them to school or to the doctor. If the government abandons people to deal with inflation on their own, they will be forced to choose between paying for gasoline and other necessities such as food, medicine, or heating.

More importantly, assisting families in affording higher prices sends a message to the global community that the US would stand by its citizens, particularly those least able to bear the increased costs of rising prices on their own.

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