Former presidential candidate Andrew Yang believes Covid stimulus checks aren’t to blame for recent inflation spikes, and he’s still in favour of giving workers free money to safeguard them from economic shocks and technological upheaval.
The universal basic income (UBI) evangelist told CNBC on the sidelines of the Bitcoin Miami conference that stimulus checks account for “maybe 17%” of the money issued under the CARES Act, a bill passed by Congress to unlock trillions of dollars in stimulus funding to help the economy recover amid global lockdowns.
“How did the remaining 83 per cent of the funds end up?” It was distributed to several organisations.
It found its way into pipes. “Yang, who ran for mayor of New York City and president of the United States on a ticket advocating for government-guaranteed, no-strings-attached monthly payments to all Americans aged 18 to 64, claimed
“Money in people’s hands for a couple of months last year was a very, very minor factor in my mind, in that most of that money has long since been spent and yet you see inflation continue to rise,” Yang said, adding that before the pandemic and Economic Impact Payments, the primary drivers of inflation were staples like education, health care, and housing, which were all independent of stimulus checks.
Consumer prices in the United States climbed by 8.5 per cent in March, the highest level since 1981. According to Yang, the spike in inflation is mostly attributable to a scarcity of commodities, which has resulted in a surge in demand.
“Everyone is concerned about inflation. I’m afraid that it’s complicating the lives of many Americans because it’s difficult to be in a scenario where your expenses are rising but your income isn’t keeping up.”
Web3 is also the most significant potential to combat poverty, according to Yang.
Because the dollar’s purchasing value is decreasing, some suggest that bitcoin can be used as a hedge against inflation.
“I anticipate that as individuals explore other methods of storing value, interest in bitcoin will grow,” Yang stated.
“People understand that if you merely have money in your bank account, it’s losing value right now unless you’re getting paid more than the rate of inflation, which is now around 7%,” Yang added.
“At the time I investigated, savings accounts were still barely paying 1% or 2%,” adds the author.
Bitcoin and other cryptocurrencies, according to Yang, are more than just inflation hedges.
They might also be able to help him achieve his lofty objective of widespread UBI adoption.
“The intersection is very significant,” Yang explained, “because if you’re trying to get buying power into people’s hands, one tool is the U.S. dollar, and I ran for president on that platform, but there’s no reason why it has to be in U.S. dollars as opposed to bitcoin or some other asset class or currency.” New currencies, he believes, will emerge from the government sector.
“You might see cities and towns experimenting with local currencies to help bring people to local small companies and organisations who aren’t getting the attention they need right now,” he added.
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A similar strategy, Yang says, may work well in the United States, similar to how Beijing is looking into putting expiration dates and other spending constraints on its digital yuan (China’s central bank digital currency, which has been in development since 2014).
“No one thinks about getting a US dollar since it will expire or can only be used in one place. “They are, nevertheless, technologies that we should be exploring in a variety of scenarios right now,” Yang said.
During the epidemic, Mark Cuban recommended doing just that: distributing cash cards with a two-week expiration date that could only be used at locally owned small businesses.
These are the kinds of things that “cryptocurrencies very naturally facilitate that U.S. cash does not,” according to Yang.