Inflation

In the Spring of 2021 the Covid Relief Bill was passed into law. This was a $1.9 trillion dollar bill that was supposed to be for Covid Relief but was basically sending cash to people. The government sent $1,400 to everyone so a family of four got a check for $5,600. In addition everyone who was collecting unemployment from their state got another $300 per week from the feds. The child tax credit was increased from $2,000 to $3,600 so the same family of four with two children got another $7,200. Then this family got another $8,000 in childcare credits and they were refundable meaning they got the money even if they owed no taxes. These people went on a wild on line spending spree and then surprise, inflation set in. Then in July of 2021 the government passed the $1.2 trillion dollar infrastructure bill. These two bills totaling $3.1 trillion was over and above the $6 trillion dollar regular budget. Now they are debating another $5 trillion in the Build Back Better bill to send more money to the above mentioned family of four. Recall the Modern Monetary Theory (MMT) that was pushed last year. This is the theory that says the Fed can create money for all of the country's needs without fear of inflation as long as the country is not at full employment. Since we have 10 million people who are not working the some feel this spending is OK.