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 with CARES law a measure passed by Congress to free up trillions of dollars in stimulus funding to support the economy in the midst of worldwide shutdowns.
“Where did the other 83% of the money go? They went to institutions. They went to pipes,” 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 conditions.
“Money in people’s hands for a few months last year – in my mind – was a very, very small factor, as most of that money has long since been spent, 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 8.5% in March, reflecting 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 that people are experiencing an accumulated demand.
“Everyone is worried about inflation. I’m worried about the fact that it’s making many Americans’ lives miserable because it’s a very difficult situation when your expenses are rising and maybe your income is not keeping up,” said Yang, who also has That said, Web3 is the most in-depth way to fight poverty.
The erosion of the dollar’s purchasing power has led some to argue 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, it’s sadly losing 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%.”
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 cut-off point is very significant, because if you’re trying to get purchasing power into people’s hands, a tool to do that is the US dollar, and I ran for president to make that case, but there’s no reason why it’s necessarily must be in US dollars as opposed to bitcoin or another asset class or currency, “Yang said. 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), Yang says 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.”