Inflation Relief Checks.

In economics, inflation refers to a general increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money.

aka Inflation is the ever increasing printing of money which in turn brings down the value of said money , The more there is in circulation the less it's worth ECON 101.

www.foxbusiness.com...

As high inflation saddles Americans with an extra financial burden, some states are helping out with one-time stimulus rebates to offset the pain of higher prices.  At least 20 states are offering one-time rebates or expanded tax credits to help residents cope with inflation as both Republican and Democratic governors seek to spend down budget surpluses mostly from COVID-19 relief funding. 

The Federal and State Government which I have began calling 'The Insane Clown Posse ' in all there wisdom are trying to off-set inflation by inserting more "Free" money back into the economy. Which is literally the Definition of inflation .

This ' Free money' is apparently being drawn from the excess Covid-Relief funding , so instead of putting this money towards actual Federal Debt they are just putting it into circulation to ease the burden of inflation on Americans by inflating the money even more. Every time you put a single free Dollar into the hands of an American Citizen it is inflated just a little bit more.

Inflation Relief Checks in and of itself is a paradoxical statement ..... anyways carry on

I'm confused here
How does it cause inflation?
It says payments in the form rebates or tax credits.
aka taking less tax/reducing tax liability
Which will go back into the economy.
Am I missing something?

a reply to: asabuvsobelow

Coming soon fire relief matches, and flood relief water balloons.

originally posted by: Mandroid7
I'm confused here
How does it cause inflation?
It says payments in the form rebates or tax credits.
aka taking less tax/reducing tax liability
Which will go back into the economy.
Am I missing something?

Yes they are sending the money in the form of Tax credits but where is the money coming from ?

Republican and Democratic governors seek to spend down budget surpluses mostly from COVID-19 relief funding. 

Covid Relief funding was money the government never had in the first place which is what created the further inflation in the FIRST PLACE .....

Every dollar put into one of these checks is Printed and the more money Printed does what again ?

originally posted by: Mandroid7
I'm confused here
How does it cause inflation?
It says payments in the form rebates or tax credits.
aka taking less tax/reducing tax liability
Which will go back into the economy.
Am I missing something?

Maple leafs are worth a dollar. You can buy one apple for one maple leaf.

Fall happens. Now everyone has maple leaves and everthing costs more maple leaves to buy things. The price of the apple goes up because for the apple farmer, everything has gone up for them/they too. But it's okay because everyone has a lot of maple leaves. So the price goes to 5 maple leaves for 1 apple.

Then spring comes..... There's no apples or maple leaves.

originally posted by: litterbaux

originally posted by: Mandroid7
I'm confused here
How does it cause inflation?
It says payments in the form rebates or tax credits.
aka taking less tax/reducing tax liability
Which will go back into the economy.
Am I missing something?

Maple leafs are worth a dollar. You can buy one apple for one maple leaf.

Fall happens. Now everyone has maple leaves and everthing costs more maple leaves to buy things. The price of the apple goes up because for the apple farmer, everything has gone up for them/they too. But it's okay because everyone has a lot of maple leaves. So the price goes to 5 maple leaves for 1 apple.

Then spring comes..... There's no apples or maple leaves.

lol well done Christ I've gone back in time to 6th grade Economics.

a reply to: asabuvsobelow

IF that's what it takes to understand the shlt show we're in, then so be it.

Nobody teaches this stuff unless you're into financial youtubers. Sad really.

a reply to: litterbaux

I have some acorns and those spikey ball things. Let's make a deal.

a reply to: watchitburn

I have a lot of maple trees bruh.

~~Acorns roasting over an open fire~~, doesn't sound that good, bring chestnuts.

originally posted by: litterbaux
a reply to: asabuvsobelow

IF that's what it takes to understand the shlt show we're in, then so be it.

Nobody teaches this stuff unless you're into financial youtubers. Sad really.

It is sad really , People cannot seem to get it through their head MONEY is not free .

Giving free money to people who have no money in an effort to equalize there lack of money does not work , that increases inflation making the money worthless to the point that you may as well have not given them anything at all .

and calling the Free money a tax rebate is like me Stabbing someone in the chest and saying no it's not murder I'm therapeutically bleeding their heart.

a reply to: Mandroid7

It’s a shell game.

There have been many different kinds of “relief”, most going to the top.

The original packages worked in a few ways.

1. The direct stimulus checks which were just printed.

2. The lowering of interest rates.

3. The fed buying assets.

4. And tax cuts.

The first is self explanatory, easiest concept in supply demand economics.

2 gets a little dicier given fractional reserve banking practices, but ultimately people borrow money (which is essentially borrowed out of thin air through treasury swaps and fractional reserve lending practices), invest it and pull a return with more money than they originally had thanks to 3.

3. The fed buys assets driving the “value” up for said assets. The “money” they used was created just for this, quantitative easing. In the past they would just buy certain bonds and treasuries, but they expanded their portfolio in 2020 to include more private markets including corporate junk bonds and even ETFs.

The problem with this is that in the past, with bonds and treasuries, they could “unwind”, it had less of an impact (even though it was still bad practice) as they could take some of that money back out of circulation once the asset reached maturity. Unloading on the public market is different. This money went up to those who played in 2 with low interest rates.

4. Tax cuts. Tax cuts are almost always the creation of money, temporarily… because it’s almost never that they’re done in tandem with spending cuts. So the government has the same liabilities with decreased revenue. Those liabilities still have to be met, and they’ll find a way to get it, plus interest.


From the 90’s to now, we’ve seen exponential growth and a widening of scope in the practice of QE, albeit it comes in cycles. It’s one of the worst economic practices, and we’ve seen a consolidation of wealth in corporations and individuals who can read the tea leaves while the purchasing power of the middle class reduces faster than their increase in wages.

a reply to: asabuvsobelow

It's much, much deeper than that.

I'm not referring to you asabuvsobelow, but to the masses. How many levels are some of these people away from the change in form, function or design in modern business? If you look at an org chart of a company like Amazon, what the heck are these people doing other than being in charge of clicking "yes" or "no".

Being a manager seems scary at first but it's not, it's really not. There are so many positions created in the last few years that are not needed to run the core companies. The bean counters are now realizing this and Elon was the first to crack the "code". This is going to be a very interesting year in 2023 while thousands of useless jobs get cut.

If you're one of these people, make sure you update and print out your resume at work. You're going to need it.

It seems Biden admin is slightly now turning US into Canada.
With "Relief Checks"

Which arent by that much.

Not enough to pay up for your living costs unfortunately. It shows how out of touch polticans are.

While currently they still push for more on Ukraine but zero for the people.

So people think Inflation is rising prices because that’s what the TV people say. Rising prices is the RESULT of inflation and Inflation is caused by BAD monetary policy by the Federal Reserve and All central banks in the world.

See it’s a lot easier to win re-election by printing money then raising taxes. And our politicians in the USA are masters of this practice.

My favorite economist explains Inflation very simply:

Nobel prize winning Economist Milton Friedman said:

“ Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output... A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.”

Milton Friedman
"The Counter-Revolution in Monetary Theory". Book by Milton Friedman, June 1, 1970.

a reply to: vNex92

When you find out about how big the money laundering scheme is, it will blow your mind. If you think FTX was big news, you ain't seen nothing yet.

Watch this 3 min clip from Milton Friedman answering a college kid’s questions about inflation in 1978.

Fantastic parallel to today

m.youtube.com...

Milton Friedman Inflation

a reply to: asabuvsobelow

The current government is fully onboard with Modern Monetary Theory.

a reply to: Brassmonkey

a reply to: Mandroid7

Look at our current situation - This inflation wasn't 'Brandon's fault' per se - It was a result of covid.

Covid happens - companies shut down a lot of production. Workforces are reduced - Government injects stimulus cash into the economy.

1. People are bored during covid spend money
2. Recovery starts to happen - people have extra money plus pent up demand from being locked up for a while and increase spending
3. Companies due to shut downs aren't ready for the spike in demand - shortages start to happen
4. As shortages happen - prices increase - law of supply and demand
5. Supply issues ripple even further through most organizations causing even more scarcity of goods and driving demand even further.
6. To compound the issue even further, housing market explodes, many people flip houses or even refi due to low interest rates and more equity in their home. Creating even larger supply of cash to increase demand
7. Inflation continues to skyrocket

Last thing the government needs to do right now is inject more cash into the system. The fed raising interest rates is a typical countermeasure to combat inflation, but this inflation is somewhat unique in that is is driven more by supply shortages than anything. Fed rate increases will cool the housing market for sure - but not sure that is the solution.

This little blip is super unique - who knows how it will get resolved, but for sure creating more cash isn't the solution.

a reply to: CriticalStinker

I left out of my causes this excellent summary from Stinker - this is also a cause of why we are where we are.