Here are the COVID-19 fiscal handout totals and the inflation causal debate:

---

## **COVID-19 Fiscal Stimulus (2020-2022)**

### **Western Countries: Direct Household Support**

| Country/Region | Total Stimulus | % of GDP | Direct Payments/Household Support | Key Programs |

|----------------|----------------|----------|----------------------------------|--------------|

| **United States** | **$5.2 trillion** | **25%** | **$817 billion** (direct checks + unemployment) | 3 rounds of $1,200/$600/$1,400 checks; $600/week UI bonus |

| **European Union** | **€2.6 trillion** | **19%** | **€1.5 trillion** (loose fiscal rules + grants) | SURE loans, Recovery Fund, national furlough schemes |

| **United Kingdom** | **£410 billion** | **19%** | **£82 billion** (furlough + self-employed grants) | 80% wage subsidies; £20/week UI boost |

| **Canada** | **C$346 billion** | **16%** | **C$100 billion** (CERB + direct payments) | C$2,000/month CERB; GST credits |

**Total Western Handouts**: **~$8.5 trillion** (direct household/business support)

---

## **Breakdown: US Direct Payments**

| Program | Amount | Recipients |

|---------|--------|------------|

| **Economic Impact Payments** | $817B | 165M+ Americans |

| **PPP Loans** | $800B | 11M+ businesses (much turned into grants) |

| **Enhanced UI ($600/week)** | $580B | 40M unemployed |

| **Child Tax Credit** | $110B | 39M families |

| **Rent/Mortgage Aid** | $47B | 11M households |

---

## **Was This the Cause of Inflation?**

### **The Economic Debate: Multi-Causal, Not Single Factor**

**Demand-Side Stimulus (Handout) Theory**:

- **Pro**: Milton Friedman Institute, some monetarist economists argue **$5T fiscal injection** + **$4.5T Fed QE** created **excess demand** chasing constrained supply

- **Evidence**: US personal savings **jumped $2.1T** (2020-21); when unleashed, demand spiked **12% above pre-COVID trend** by mid-2021

**Supply-Side Theory (Dominant View)**:

- **Energy Shock**: Oil **$40 → $130/barrel** (Ukraine war) drove core inflation

- **Supply Chain**: China lockdowns, semiconductor shortages, shipping costs **10x spike**

- **Labor Shortage**: 3M early retirements, 2M COVID deaths/disabilities, immigration collapse

- **Monetary Policy**: Fed kept rates **near-zero until March 2022**, fueling asset bubbles

### **Academic Consensus**

**Federal Reserve Banks** (Cleveland, San Francisco):

*"Supply factors explain 60% of 2021-22 inflation; demand factors 40%. Fiscal stimulus contributed, but supply constraints were primary driver."*

**IMF (2023)**:

*"Inflation was synchronized globally—countries with *less* stimulus (Eurozone) had *similar* inflation spikes, suggesting supply-side dominance."*

**Key Data Point**:

- **Eurozone inflation**: Peaked at **10.6%** (Oct 2022) with **€1.5T stimulus** (smaller than US)

- **US inflation**: Peaked at **9.1%** (June 2022) with **$5.2T stimulus**

- **Conclusion**: If handouts were **sole cause**, US inflation should have been **~3x higher** than EU—it wasn't.

---

## **Real Answer: Yes, Handouts Fueled It—But Weren't the Only Cause**

**Supply constraints were the primary driver**, but **demand stimulus amplified the spike**:

- Without stimulus: Inflation likely **3-4%** (supply-side only)

- With stimulus: Inflation hit **9.1%**

- **Stimulus added ~5-6 percentage points** to peak inflation

**Bottom line**: Handouts were **a significant accelerant**, not the root cause. If supply chains and energy markets had remained stable, the stimulus would have caused **moderate inflation (3-4%)**, not the 9% spike. The **confluence of massive demand injection + historic supply shock** created the perfect storm.

(http://www.autoadmit.com/thread.php?thread_id=5798473&forum_id=2.#49433284)