Covid Relief is Causing Huge Inflation and a Labor Shortage

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Garrett Duncan, Contributor

Ever since the White house began to pay people unemployment that is higher than the minimum wage, we were getting set up for a collapse.  And now, Joe Biden plans to give out even more money.  (DW Business)  This will inevitably lead to more inflation.  Prices for food, construction equipment, and just plain labor are going up!  This is caused by two things the government is doing.

The relief money being given to people is new money, meaning it was just printed and put into the economy.  This is “getting money”, rather than “making money”.  This money has no value, unless it is given value by the market.  So when the government gives out money like this, the value of all money in general goes down, because despite the amount of money increasing, the amount of value in the American market has not changed.  This is how inflation happens.

That’s why when the government is constantly printing money and giving it to people, during a pandemic, it is not going to mean good things.  You should only do this in order to jump start the economy at the end of the pandemic, but we have been doing it the whole way through.  The government has spent 2.8 trillion dollars as of the day I am writing this, and they plan to spend 3.2 Trillion.  (USA Spending)  Nearly a fifth of cash in America was printed in 2020.  (City A.M.)  These are not good numbers, and government spending needs to be slowed immediately.

This might seem unimportant, but remember, these numbers only represent the cause of inflation.  Lets look at the results.  Gas prices have risen by 9.1 percent.  Fruits and vegetables have risen 2 percent.  And meat prices have risen 0.4 percent.  (NBC News)  This is not even mentioning lumber, which has risen 340 percent from 2020 prices.   (CNBC News)  These problems are bad enough, but more arise when you look at where this inflation causing money is going.

Though some pandemic spending went to projects looking for a vaccine, a huge amount of money has gone towards unemployment.  The government basically started paying people to stay home and not get jobs.  (New York Times)  There is a new federal plan that pays people 300 dollars every week if they don’t have a job.  Some states have decided not to let the federal government beat them though, as they raised their unemployment benefits to give people without jobs more money than those who work for minimum wage.  (CNBC News)  Every state other than Alabama, Arizona, Florida, Louisiana, Mississippi, and Tennessee pay people more than or equal to minimum wage to stay at home.  They have all been mysteriously seeing people quit their jobs and stay at home for no reason.  To me it seems simple.  Why would they work at McDonalds when they could get paid more to stay home?

This has been causing people to just leave their jobs and mooch off the government.  People who had small businesses have been destroyed because they did not get any benefits, and a lot of them were shut down due to safety concerns.  Gas, food, and just plain wood are at prices that would have been considered insane in 2019.  It seems obvious that what the government is doing isn’t working, and that something needs to change.  In my opinion, the best place to start is by not paying people more to stay home than to work, and to not print so much money that nobody can afford the prices of any store.