Central PA News

An amended version of the American Rescue Plan Act passed last year in the Senate, which included a $1.9 trillion COVID-19 relief package that some economists and many Republicans believe has contributed to the country's inflation issue.

The package was backed by Sen. Bob Casey (D-PA) and opposed by Sen. Pat Toomey (R-PA), the Senate reported on its site.

Four researchers at the Federal Reserve Bank of San Francisco said in a letter on FRBSF's site that massive government spending during the pandemic has caused U.S. inflation to surge more than in other developed economies around the world. This is in contrast to the norm, where the U.S. and other similar developed economies are usually in line with each other.

"Fiscal support measures designed to counteract the severity of the pandemic's economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021," Oscar Jorda, Celeste Liu, Fernanda Nechio and Fabian Rivera-Reyes said in the letter. "However, without these spending measures, the economy might have tipped into outright deflation and slower economic growth, the consequences of which would have been harder to manage."

A recent poll by the Senate Opportunity Fund conducted on March 15-17, which surveyed 800 people nationally who were likely to vote in the general election, reported that 56% of Americans blame President Joe Biden for the inflation problem.

Sixty percent of voters said Biden has done a poor job of handling the inflation issue, 35% said he has done a good job, and 5% of voters had no opinion on the matter, the Senate Opportunity Fund reported. Conservative voters had the strongest disapproval, with 74% saying he has done a poor job. However, among liberal voters, 57% think Biden has done a good job.

Trading Economics reported that inflation, which was at 7.9% using the latest data available from February, is at a 40-year high.

Gasoline is a main driver of consumer inflation, with prices well above $4 per gallon in much of the country, Metro Business Daily's Gasoline Misery Index reported. The most recent index showed that the average American pays $704 more than they did last year on gas.