Stimulus check that is not to blame for inflation: Andrew Yang
Stimulus check that is not to blame for inflation: Andrew Yang

Stimulus check that is not to blame for inflation: Andrew Yang

MIAMI – Former presidential candidate Andrew Yang says Covid stimulus checks are not to blame for the recent rise in inflation – and he still advocates sending people free cash as a way to isolate workers from economic shocks and technological disruption.

The Universal Basic Income (UBI) Evangelist told CNBC on the sidelines of the Bitcoin Miami conference that stimulus checks include “maybe 17%” of the money issued by the CARES Act – a measure passed by Congress to unlock trillions of dollars in stimulus funding for strengthen the economy in the midst of worldwide shutdowns.

“Where did the other 83% of the money go? It went to institutions. It broke down,” said Yang, who ran for mayor of New York and president of the United States on a platform advocating for guaranteed monthly payments from the government to all. citizens aged 18 to 64 years, without ties.

“Money in people’s hands for a few months last year – in my opinion – was a very, very small factor, as most of that money has been spent for a long time, and yet you see inflation continue to rise,” Yang said. who also pointed out that prior to the pandemic and economic impact payments, the primary drivers of inflation were basic goods such as education, health care and housing, all of which were independent of stimulus control.

Consumer prices rose by 8.5% in March, reflecting price increases not seen in the US since 1981. According to Yang, the rise in inflation has a lot to do with the fact that there are not enough goods to go around, so people are experiencing pent-up demand.

“Everyone is worried about inflation. I’m worried that it’s making many Americans’ lives miserable, because it’s a very difficult situation when your expenses go up and maybe your income doesn’t keep up,” said Yang, who has also said, that web3 is the most profound opportunity to fight poverty.

The erosion of the dollar’s purchasing power has led some to argue for bitcoin as a hedge against inflation.

“I think interest rates will rise as people look for alternatives in terms of how to store value,” Yang said of bitcoin. “People know that if you just have a bank account full of money, then unfortunately it loses value right now, unless you get paid above the inflation rate, which is to say what 7% today,” Yang said.

“Last time I checked, savings accounts still paid only 1% or max. 2%.”

Where bitcoin meets UBI

Cryptocurrencies like bitcoin are not just an inflation hedge, according to Yang. They could also help realize his big vision for widespread UBI rollout.

“The intersection is very significant, because if you try to get purchasing power in people’s hands, a tool to do so is the US dollar, and I ran for president, but there is no reason why it should necessarily be in US dollars. as opposed to bitcoin or another asset class or currency, “said Yang. He thinks we will see new currencies emerge from the public sector.

“You can get municipalities and communities to experiment with local currencies that will help drive people to local small businesses and nonprofits that may not get the support they need right now,” he said.

Similar to how Beijing is considering linking expiration dates and other consumption rules to its digital yuan (China’s central bank’s digital currency, which has been under development since 2014), says Yang that a similar model could work well in the US

“No one is thinking of getting a US dollar and it will expire or it can only be used in one place and not another. But these are utilities that we should be experimenting with in different environments right now,” Yang said.

During the pandemic, Mark Cuban suggested doing just that: send prepaid cards that can only be used at locally owned small businesses, where the money expires in two weeks, to run the business. Yang says it’s the kind of thing that “cryptocurrencies very naturally allow US dollars not to do.”

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