As the cost of living rises, Americans struggle with the absence of aid

A young adult pumps gasoline with a worried expression on his face.

Image Source: Getty Images

It’s getting harder and harder to keep up without a financial lifeline.


Key points

  • Rampant inflation and high gas prices are squeezing cash-strapped consumers.
  • Many people are still hoping for more stimulus aid.

For many months, consumers have been dealing with skyrocketing costs of living as a result of runaway inflation. And new data shows higher prices may be here to stay for a while.

In February, the Consumer Price Index, which measures fluctuations in the cost of consumer goods, increased 7.9% annually. That represents the index’s biggest annual jump in more than 40 years. And not surprisingly, higher grocery, housing and gasoline costs were all contributing factors to the higher February number.

And speaking of gas costs, tensions abroad don’t help in that regard. Earlier this week, the average cost of a gallon of gasoline hit $4.17, an increase of $0.50 from the previous week. And now, experts are warning that gas prices could hit $4.50 a gallon in May.

All of this leaves many consumers wondering if lawmakers will step up and make some kind of help available to those who are struggling. Last year, Americans were aware of a generous stimulus check and monthly Child Tax Credit payments. But should we expect to see similar help in 2022?

Consumers may need to prepare for tough times

When the American Rescue Plan was signed into law in March 2021, the US economy was still in pretty dire straits and unemployment was still rampant. A year on, the overall economic picture looks much brighter, despite rising inflation. Unemployment has fallen, jobs have increased, and wages have risen, albeit at a slower rate than inflation.

All told, given current economic conditions, it’s hard to make a case for another broad round of stimulus checks. And that’s not something Americans should anticipate.

On the other hand, lawmakers are still interested in extending the increased Child Tax Credit to 2022. Last year, the maximum value of the credit increased from $2,000 in 2020 to $3,000 for children ages 6 to 17, and $3,600 for children under 6 years old.

Just as important, half of the Child Tax Credit was paid in monthly installments that hit bank accounts between July and December. This year, those monthly payments have been off the table so far. But a revival of those payments is not something that Americans should rush to cancel.

Lawmakers must find a way to engage with the boosted credit to convince naysayers to join it. That could mean introducing stricter income limits for eligibility or introducing a work requirement, something that didn’t dictate eligibility in 2021.

Following these steps could reduce the number of people who are eligible for boosted credit. But it could also serve the important purpose of putting extra money in the hands of Americans at a time when they need it most.

Whats Next?

The Build Back Better plan, which included legislation in support of a boosted child tax credit for 2022, is virtually dead in the water. But lawmakers may still look to negotiate individual components of Biden’s massive spending bill, including the credit, in an effort to make that financial lifeline available.

Runaway inflation is very likely to be with us for quite some time. And while it’s hard to make the case for another round of stimulus checks, it’s not that hard to argue that parents of children should continue to get the support they got last year.

The best credit cards end interest until 2023

If you have credit card debt, transfer it to this top balance transfer card locks you in with a 0% introductory APR through 2023! In addition, you will not pay an annual fee. Those are just some of the reasons why our experts rate this card as the best option to help control your debt. Read the full review of The Ascent free and apply in just 2 minutes.

Spread the love

What do you think?