Most people in line for the third stimulus check have received their payment under the American Rescue Plan. But the situation stays grim as unemployment rates continue to be high. Many influential lawmakers are pushing for the fourth round of stimulus checks that will last Americans till the end of the year.
The $1,400 max Economic Impact Payment has gone out to 165 million individuals and families, and another 1 million payments are due this week. The total amount that has gone out to Americans affected by the economic downturn triggered by the pandemic is $3,200 in the three rounds of payments.
The Case For A Fourth Stimulus Check
But Americans continue to remain in financial distress as the economy is yet to take off and millions continue to be unemployed. The Kaiser Family Foundation has revealed that a third of Americans are still struggling to meet their basic needs.
Many Americans have already spent the $1,400 stimulus check to pay for their basic needs and mounting debts. Most recipients say that they expect the stimulus check to last them less than 3 months as they struggle to keep up with expenditure.
Demand Mounts For A Fourth Round Of Payments
Both lawmakers and the common people have got into the act. More than 2.2 million people have signed a petition on change.org for recurring monthly payments of $2,000 for adults and $1,000 for children.
Lawmakers too have latched on. 20 Democratic lawmakers have sent a letter to President Biden pointing out that the third stimulus check will not last them long. They say that almost 60% of Americans have stressed that the $1,400 stimulus check will last less than 3 months.
Some States Have Plans For Their Residents
Californians could be in line for a fourth state stimulus check if Governor Gavin Newsom’s plans are passed. He plans to give $600 for each resident under a plan unveiled last week. If successful, this plan would benefit two0-third of the Golden State residents.
Spending Only On The Basics
The senators have not specified the amount under the fourth stimulus but their previous demand was for $2,000 that finally yielded the $1,400 stimulus check.
Most people are using the stimulus check to bring down mounting debts, while others have managed to set some aside for a rainy day. It indicates the continuing concerns as people are not prepared to spend beyond the basics. Food and housing continue to be the major areas of spending for most beneficiaries, according to a survey by Bloomberg/Morning Consult.
Around 70% of people plan to use the amount for immediate finances, a survey by Bankrate.com revealed. The share of people who still need stimulus support continues to be quite high. A third of people believe that the stimulus payment will last them less than a month.
Experts Too Step In For More Support
Top economists, including Jason Furman, an economist in the Obama administration had signed a letter that called for recurring stimulus support throughout the pandemic.
Though the economy has shown signs of a turnaround, wages continue to be low compared to pre-pandemic levels. Many have not tapped into government programs. Only 40% of the jobless receive unemployment aid, according to a study in March by economist Eliza Forsythe.
The difficulty in going through the process of unemployment aid has discouraged many Americans while many others are ignorant of the provisions.
The Chances Of A Fourth Check
Analysts including Ed Mills from Raymond James have cautioned against getting the hopes up. They have pointed out that the Biden administration is at the moment preoccupied with the American Jobs Plan, the $2 trillion plan for overhauling the infrastructure. If successful, this plan could give a huge boost to the infrastructure not seen since the building of the interstate highways or the space program decades ago.
Biden’s Infrastructure Plans
Biden has projected the investment as an investment in America that will create millions of jobs. The funds will be for the roads, bridges, water systems, the electrical grid, and more. There are also plans for the internet infrastructure, housing, and the education system.
The American Families Plan Could Provide Direct Stimulus
The third part of President Biden’s plans to restore the economy to its pre-pandemic levels. The plan is to bring back the 2 million women who were forced out of the workforce. There are also plans to add at least 4 years of free education, provide direct support to children and families, and extend tax cuts for workers and families with children.
Checks That Are Already On The Way
Much needed relief will pour in, starting this July. People will start receiving up to $300 per child through December 2021. Half of the proposed sum will come in as tax credit against the 2021 tax returns.
The Vaccination Drive Could Be A Game Changer
The vaccination drive could pave the way for a rebound in the economy. Industries are set to open and more jobs will be created. A boom in the economy could set in and last till 2023 according to Jamie Dimon, CEO, JPMorgan Chase.
The boost in savings, an increase in deficit spending, improvement to the infrastructure, and finally the end of the pandemic could combine to trigger an economic boom. This diminishes the urgency for more government stimulus as more unemployed people get back their jobs. Unemployment rates could fall to 4.3%, say Oxford Economics economists Gregory Daco and Oren Klachkin, though the path ahead is long. 4 million people continue to remain unemployed.
But there are better times ahead as the markets open thanks to an intensifying vaccination drive, while fiscal stimulus leads to a surge in hiring.