Consumers have been dealing with sky-high living costs as a result of excessive inflation for several months. And fresh research indicates that rising prices may be here to stay for the foreseeable future.
The Consumer Price Index, which monitors changes in the cost of consumer products, increased 7.9% on an annual basis in February. This is the index’s biggest annual increase in over 40 years. Higher grocery, shelter, and gas prices all contributed to February’s higher number, which is unsurprising.
And, while we’re on the subject of gas prices, international tensions aren’t helping matters. The average price of a gallon of gas hit $4.17 earlier this week, up to $0.50 from the previous week. Experts now predict that petrol prices might reach $4.50 per gallon by May.
Many people are asking whether the government will step in and provide some form of assistance to those who are hurting as a result of all of this. Americans received a large stimulus package and monthly Child Tax Credit payments last year. Should we anticipate similar assistance in 2022?
Consumers may have to prepare for difficult times.
The US economy was still in bad shape and unemployment was still high when the American Rescue Plan was put into law in March of 2021. Despite rising prices, the overall economic outlook is much more upbeat a year later. Unemployment is down, job creation is up, and salaries are rising at a slower pace than inflation.
Overall, given present economic conditions, it’s difficult to justify another round of sweeping stimulus measures. As a result, that is not something that Americans should expect.
Legislators, on the other hand, are still committed to extending the expanded Child Tax Credit through 2022. Last year, the credit’s maximum value increased from $2,000 to $3,000 for children aged 6 to 17 and $3,600 for children under the age of 6.
Moreover, half of the Child Tax Credit was paid in monthly installments between July and December, which were deposited into bank accounts. So far this year, those monthly payments have been ruled out. However, a resumption of those payments is not something Americans should dismiss.
To persuade skeptics to support the increased credit, lawmakers must find a way to compromise on the issue. That might imply imposing higher income limits or imposing a labor requirement, both of which were not in place in 2021.
By taking these procedures, the number of people who are eligible for the increased credit may be reduced. However, it may also serve the essential purpose of putting more money in the hands of Americans at a time when they are in desperate need of it.
What comes next?
The Build Back Better proposal, which includes legislation to support a higher Child Tax Credit in 2022, is effectively gone. However, lawmakers can still try to negotiate particular parts of Biden’s enormous spending bill, such as the credit, to get that financial lifeline.
There’s a good likelihood that we’ll be dealing with high inflation for a long time. While it may be tough to argue for another round of stimulus checks, it is not as difficult to argue that children’s parents should continue to receive the assistance they received last year.
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