The pandemic and its aftermath have been a roller-coaster period, especially for low and moderate-income citizens. While there was continuous federal support through stimulus checks and other forms of support for both citizens and others affected, it has dried up even as the situation turned full circle and the economic downturn is back to assail citizens.
The federal administration moved in immediately after the nation went into a prolonged lockdown period following the declaration of a pandemic in February 2020. The whole nation ground to a halt. Businesses shut down and people were suddenly without any source of income.
People found it tough, even impossible, to put food on the table, and pay their home rent or their utility bills. They were in danger of defaulting on their credit card and other payments.
The federal moved in immediately with schemes that would send money directly to citizens. The administration realized that going about it the normal way would have delayed the process as any support measures would get trapped in bureaucratic gridlocks.
The Successive Stimulus Checks Brought Normalcy In An Abnormal Year
It Was an unprecedented period in the history of the US as even during World War II the economy had never come to a dead stop. For the first time, the administration had to support a major part of the population who were left without any form of support.
But all such support dried up by the end of 2021. The federal government had devised a comprehensive plan for supporting both the ordinary citizens and also businesses, organizations like educational institutions, hospitals, and local and state governments.
Support to businesses ensured that they continued to operate at some level even when the economy had been forced into a shutdown. Workers received their salary even though it was curtailed in most cases. But this continuation of operation ensured that the businesses were ready to take off once normalcy returned. it wasn’t an effort to start from scratch.
The economy thus managed to both stay on track and also moved ahead rapidly once the shutdown was lifted. Production quickly moved into top gear and the government did not need to hold hands by the end of the second quarter of 2021. The recession was sharp but brief, one of the shortest on record.
For Most, The Economic Situation Turned A Full Circle Since The Pandemic
By the third quarter of 2021, the federal administration experienced an economic boom. But prices were moving up simultaneously and inflation reached close to the 8% mark by the end of 2021. The good that happened with the recovery of the economy evaporated with the rise in prices and people were back to square one.
In the absence of federal support, states have come up with stimulus checks funded by the funds they received under the American Rescue Plan Act signed by President Biden immediately after he come to power in the first quarter of 2021.
The support received by states, local bodies, and businesses complemented the support given directly to citizens. While funds given to businesses ensured that factories and other sectors continued to remain in business despite an almost total shutdown of business during the month immediately after the pandemic restrictions were withdrawn.
But a combination of factors ensured that the economic situation continued to be just as grim for most citizens. Prices continued to creep up and people were earning less than what they earned before the pandemic when adjusted for inflation.
There has been a healthy increase in wages since the pandemic. it is even 5% higher than what it was on average when compared to the pre-pandemic period. But rising prices have turned it into a negative increase which has left citizens more despondent than ever.
For many, the present situation has been more desperate than the periods immediately after the pandemic was declared in February 2020. Then people received immediate aid within weeks of the total shutdown. The economic downturn spurred by the pandemic had hit people hard. But the measures taken by the federal administration over the past two years had served to alleviate the pressure of a sudden pause in income.
People were suddenly left without any source of income and struggled to put food on the table, pay their home and utility bills, and clear their credit payments. But the stimulus checks began coming in within weeks of the declaration of the lockdown.
The first of the stimulus checks came in April 2020 and the $1,200 payment helped people take control over their finances. They were able to stave off immediate starvation and homelessness.
The second and third stimulus checks came in quick succession in the first quarter of 2021. Families received up to $10,000 within months and were able not just to stave off immediate financial emergencies, but also saved a substantial part of it.
State Stimulus Checks Only Hope Of Government Aid
State governments have moved in with stimulus checks of their own in the face of a total shutdown of federal support. With Washington facing a political gridlock that has stymied any chances of any further stimulus checks.
The Republicans have forcefully linked the third stimulus check to the increase in prices. With the midterms months away, they managed to throw the ruling Democrats off track and forced them to backpedal from any further move for direct payments.
The number of states that have given stimulus checks or are in the advanced process of giving out payments has swelled to 21, close to half of the 50 states. California and Florida are among the states that have recently joined the list of states that are giving out payments to residents who have been severely affected by the rise in prices of all essential goods and services.
While California is giving up to $1,050 to around 23 million residents, or 60% of the state population, Florida has taken a more conservative approach and has used ARPA funds to send stimulus checks to around 9,000 families. Foster parents and related and non-related parents will get a $450 stimulus check. people on welfare will also receive the same amount.