Federal stimulus checks approved by Congress began even as the nation went into a prolonged lockdown in 2020. It unleashed the largest flood of federal support in human history. Around $5 trillion was paid in support of small businesses, restaurants, airlines, local governments, schools, and various institutions across the nation. And the largest share went directly to individuals and families in the form of three rounds of stimulus checks.
Economists are unanimous that these financial generosities helped the economy recover faster than it would otherwise have from the largest downturn after the Great Depression almost a century ago. The pandemic-induced recession lasted just 3 months and was the shortest on record.
The Stimulus Checks And Other Federal Support Staved Off Poverty And Jumpstarted The Economy
The stimulus checks ensured that the economy was back on rails quickly, people had money in their hands, their credit rating did not get a negative rating, they did not lose their homes and hearth, and there was food on every table in the US.
But a year after the American Rescue Plan Act of President Biden, and over 2 years since the federal efforts started with the passing of the CARES Act, the actual impact of the stimulus checks remains unclear.
The biggest negativity linked to the Economic Impact Payment was that it helped fuel inflation, the highest in over 4 decades. The direct stimulus checks to individuals and families alone cost the economy $1.8B. It included stimulus checks worth $817B. Unemployment and food assistance came to $678B more.
Despite the negative aspects that include fraud, and payments to people who did not deserve them, the stimulus check proved to be a life preserved. They succeeded in saving millions of Americans from poverty, it saved businesses from shutting down and prevented people from becoming homeless.
The money also helped state and other local governments shoulder a significant part of the pandemic-linked costs and most of them were able to avoid deep cuts in their budgets. Many states have reported a surplus thanks to the stimulus funds and the sharp economic recovery seen in the last two quarters of 2021.
States Awash In Federal Dollars Move To Aid Residents
States have been handing out generous stimulus checks for various government schemes in recent months for much-needed improvement in infrastructure. While the checks bear the governor’s signature, the money has come from the federal treasury. It is part of the huge infusion of pandemic relief aid that is helping to fuel record budget surpluses in many American states.
The states are now using these huge surpluses to help their residents out of the high inflation that has brought the economy to its knees. But the federal administration is out of money to pay for the most basic means t protecting people during the pandemic, The matter has been made worse by the republican opposition who have proved a stumbling block in every initiative taken by the President.
Stimulus Checks From States
California was the first to give out state stimulus checks from its surplus budget. The last batch of the Golden State Stimulus check II was sent out on April 22, though the vast majority will be mailed in May.
The program was created to help Californians who continue to struggle during the pandemic. It expanded aid to immigrants who were left out of previous rounds of federal stimulus payments.
Governor Gavin Newsom’s latest stimulus check initiative, in the form of gas cards to combat high gas prices, could give residents a $400 stimulus check for each car subject to a maximum of two cars per family. It is expected to counter the high gasoline prices, along with a corresponding increase in prices of essential items.
Legislative leaders in California first unveiled a plan to cope with rising inflation in mid-March. The initial plan was to spend at least $200 on taxpayers with a joint income below $250,000, even if they did not own a car.
Gov. Newsom revised the plan on his own to send at least $400 to every registered vehicle owner in the state, with the focus on high gas prices. But the first payments may be delayed until September as a budget deal is yet to be sorted out.
The city of Chicago is also offering stimulus checks to low-income residents to cope with the sudden rise in fuel prices following inflation. These stimulus checks are expected to be in the form of transit cards and pre-paid gas cards. Eligible residents will receive either a transit card worth $50 or a $150 gas card.
The initiative has been named Chicago Moves and will provide $12.5M in transportation relief to residents who are in desperate need. 75% of these cards will go to low-income families or residents in community areas who face higher mobility hardships. The remaining will be distributed among eligible recipients across Chicago.
While gas card recipients will be able to use them at stations within city limits, the transit cards will be usable at Ventra vending machines in CTA stations, Ventra retail locations, or on the Ventra mobile app or the website.
Residents of Delaware may be getting $300 as a direct stimulus check, which is planned to go out on May 31 to residents who have filed their state income tax returns for 2020.
The 2022 Delaware Relief Rebate Program was signed by Gov. John Carney on April 14. The program will bring immediate economic support to residents through the $300 stimulus check.
Married couples who file jointly will receive a $600 stimulus payment. Non-filers will have to wait for their payment. A plan will be developed by October 17.
Residents of Indiana will also be receiving a stimulus check worth a maximum of $125 per single adult or $250 for married couples who file returns jointly. Most residents are eligible to receive this stimulus payment as it is being funded by a state budget surplus.
The Indiana stimulus payment is slated to start this month and will continue to be paid through the fall. The money will arrive either through direct deposit or paper checks sent through the US Postal Service. It will be sent to residents who have filed their state income tax returns before January 3, 2021.