- In an interview with CNBC, former presidential candidate Andrew Yang talked about rising prices.
- He says that stimulus checks were just a fraction of government spending and aren't to blame for inflation.
- Instead, he said, rising prices have come from pent-up demand for limited goods.
Prices are rising, but don't blame the stimulus checks sent out during the pandemic, Andrew Yang says.
In an interview with CNBC, Yang — a former presidential candidate and former candidate for mayor of New York City — said that stimulus checks were not a big factor in rising costs. Yang has famously been an outspoken advocate for universal basic income, UBI.
"Money in people's hands for a couple of months last year — in my mind — was a very, very minor factor, in that most of that money has long since been spent and yet you see inflation continue to rise," Yang told CNBC.
Congress approved three separate rounds of direct payments to most Americans over the past two years. Research from 2020 found that year's government support helped keep 12 million people out of poverty. In fact, stimulus spending helped slash poverty by nearly half during the first year of the pandemic. When stimulus checks and enhanced unemployment lapsed for the first time in 2020, nearly 8 million people fell into poverty.
Yang said that stimulus checks for individuals made up just a fragment of the $2 trillion that the federal government spent on the CARES Act. The other "83%" of the money from the CARES Act "went to institutions," Yang said. "It went to pipes."
Some have pointed to the infusions of cash as a driver of skyrocketing inflation. In March, inflation rose to 8.5%, a 41-year high. Yang told CNBC that the climb in inflation comes from pent-up demand for a limited supply of goods. As Insider's Emma Cosgrove reported in October, shortages weren't popping up just because of the supply chain — they were driven by Americans' insatiable appetite for goods. Another factor is ongoing labor shortages.
"Everyone is concerned about inflation," Yang told CNBC. "I'm concerned about the fact that it's making a lot of Americans' lives miserable, because it's a very difficult circumstance when your expenses are climbing, and maybe your income isn't keeping pace."
The last round of $1,400 stimulus checks were part of President Joe Biden's stimulus law, which was passed with only Democratic votes. Republicans blame the stimulus for causing the highest inflation in four decades. But a Federal Reserve analysis last year suggested the measure was only partly to blame for prompting the economy to overheat.