MIAMI — Former presidential candidate Andrew Yang says Covid stimulus checks aren’t to blame for the recent spike in inflation — and he’s still in favor of sending people free money as a way to insulate workers from economic shocks and technological disruptions.
The Universal Basic Income (UBI) evangelist told CNBC on the sidelines of the Bitcoin Miami conference that stimulus checks make up “maybe 17%” of the money issued with the CARES Act — a measure passed by the Congress to release trillions of dollars in stimulus funding to shore up the economy amid global shutdowns.
“Where did the other 83% of the money go? It went to the institutions. It went to the pipelines,” said Yang, who ran for mayor of New York and the US president on a platform advocating guaranteed monthly government payments to all citizens. from 18 to 64 years old, without conditions.
“The money in people’s hands for a few months last year – in my mind – was a very, very minor factor, as most of that money has been spent for a long time and yet you see the inflation continue to rise,” said Yang, who also pointed out that before the pandemic and the economic impact payments, the main drivers of inflation were commodities such as education, health care and housing, all of which were independent of stimulus checks.
Consumer prices rose 8.5% in March, reflecting increases not seen in the United States since 1981. The surge in inflation, according to Yang, has a lot to do with the fact that there isn’t enough goods to go around, so people are experiencing pent-up demand.
“Everyone is worried about inflation. I’m concerned that it’s making the lives of a lot of Americans miserable, because it’s a very difficult situation when your expenses go up and your income maybe doesn’t keep up. not the beat,” Yang said. , who also said that web3 is the deepest opportunity to fight poverty.
The erosion of the dollar’s purchasing power has led some to argue for bitcoin as an inflation hedge.
“I think the level of interest will increase as people look for alternatives in terms of storing value,” Yang said of bitcoin. “People know that if you just have a bank account full of money, unfortunately it loses value right now, unless you get paid above the rate of inflation, which is 7%, these days,” Yang said.
“Last time I checked, savings accounts were still only paying 1% or 2% max.”
Where bitcoin meets UBI
Cryptocurrencies like bitcoin aren’t just a hedge against inflation, according to Yang. They could also help realize his grand vision of widespread UBI deployment.
“The intersection is very important because if you’re trying to put purchasing power in people’s hands, one tool to do that is the US dollar, and I ran for president to make that point, but there’s no reason it necessarily has to be in US dollars as opposed to bitcoin, or any other asset class or currency,” Yang said. He thinks we’ll see new currencies emerge of the public sector.
“You can have municipalities and communities experimenting with local currencies that will help attract people to local small businesses and nonprofits that may not be getting the support they need right now,” did he declare.
Similar to how Beijing plans to attach expiration dates and other spending rules to its digital yuan (China’s central bank digital currency that’s been in development since 2014), Yang says a similar model might work well in the United States.
“No one thinks of getting a US dollar, and it’s going to expire, or it can only be used in one place and not another. But these are utilities that we should be experimenting with in different contexts right now,” said Yang said.
During the pandemic, Mark Cuban has suggested doing just that: sending payment cards that can only be used at local small businesses, where the money expires in two weeks, to stimulate business. Yang says that’s the kind of stuff that “cryptocurrencies very naturally allow for, unlike the US dollar.”