Stimulus Check Will Be Back In The Next Recession Say Analysts

stimulus check
stimulus check

The multiple stimulus checks that went out during the prolonged pandemic were a big help for a large section of Americans. For the first time, it pushed up the quality of life for Americans in the most devastating period in its history since World War II. It provided support during the most crucial period as the economy went into an immediate slide as businesses shut down across sectors and people lost jobs in their thousands.

Within weeks the situation had deteriorated to such an extent that people were struggling to put food on the table, pay their home rent and mortgage, and clear their utility bills. For the first time for millions, they were in danger of reneging on their loan and credit card payments.

The federal administration moved in quickly, after the initial dithering on whether the pandemic had crossed America. While the country leading expert on infectious disease Anthony S. Fauci hunker down way more than America was doing, and then-president Trump dithered and disagreed that there was any problem. He spoke about not letting the cure be worse than the problem itself.

But as he oversaw the unemployment spike, the stock market collapsed, and the national mood devolve into collective anxiety. Even as people were falling sick and dying, he continued to deny that things were turning dangerous. And his rosy surmises did not help in the fight against the pandemic as it lulled people into a false sense of security. And that proved disastrous for the economy. The pandemic hit with unprecedented ferocity.

And it was Fauci who rebutted Trump’s half-truths, absurdities, and blatant lies. This confusion created at the very top was instrumental in dealing with the pandemic and delayed the economic recovery of America, prolonging its agony.

Stimulus Check
Stimulus Check

Even as Trump kept dismissing the severity of the crisis, he kept blaming others for it. And that included Barack Obama, even the Democrats, the Europeans, and the Chinese.

The Initial Delay Cost The Economy Dearly And The Stimulus Check Was Also Deferred Consequently

The delay in declaring the pandemic led to the pandemic spreading more rapidly across America. And the shutdown had to be total across the nation instead of being confined to a localized area as the pandemic had spread by then. Cases began to be reported across America and it would go on to claim around 1.1 million before it could be brought under control.

The stimulus checks came in soon after to control the severe economic downslide that followed the severe outbreak of the pandemic. millions lost their jobs within weeks or were forced to accept austere pay cuts.

With a substantial percentage of the population living paycheck-to-paycheck, only direct and immediate stimulus support from the federal government could rescue Americans from imminent starvation, credit default, and homelessness.

The first of the three rounds of stimulus checks came soon after in April, 2020. The $1,200 payment help citizens pay for their food, cut down on their debts, and ensured that they could clear their rent or mortgage. The $ 600-second stimulus check was sent in December 2020 as the pandemic proved to be more severe and prolonged.

With a change in guard at Washington, things began to speed up as incoming President Joe Biden signed the American Rescue Plan Act setting in motion a comprehensive package of support that sent a $1,400 stimulus check to most Americans through the economic impact payment.

But the ARPA was not limited to merely the direct support afforded to individuals and households. The support measures were more wide-ranging and covered businesses, an organization such as educational institutions and hospitals, special packages for marginalized communities, and generous funds to states, tribal and local governments.

There Were Reports That Many Missed Out On The Stimulus Check Support

The plan led to many other support measures for marginalized communities. The maximum child tax credit was expanded under the Rescue Plan and increased the maximum child tax credit given to each child aged 5 and younger to $3,600  per child and $3,000 per child aged between 6 and 17.

Those who qualified were automatically sent the payments between July and December 2021 on the 15th of each month. The rest were given when beneficiaries filed their 2021 income tax returns in the first quarter of 2022. Around 35 million families benefitted from just that part of the stimulus support.

Much of the amount was used to pay for baby food, school clothes, rent, extra toilet paper, and car payments. Those extra $250-$300 gave parents hope. Just the expansion of the child tax credit with the monthly stimulus check cut child poverty in America by close to a third.

Stimulus Check

But one thing that clouded most aid under the Rescue Plan, or any other plan, was that the poorest families had the most difficulty accessing the payments. This was something that was not captured by any government number. An independent study conducted by the University of Michigan found that a third of the families of nearly 3,000 who were making less than $500 a month had not received the money. For families earning above $1,000, the figure was 13%. Parents with lower levels of education and Black and Latinos were also more likely to miss out.

More States Move Ahead With Stimulus Checks For Residents

California and Florida are among the latest states to declare stimulus checks for their residents. With this, the number of states has swelled to 21 and is creeping steadily towards the halfway mark. The states have been helped by a budget surplus in some cases. But the bulk of the funds has been made up with the support of the Rescue Plan funds that were allocated to states for spending on relief and rehabilitation measures.

Colorado has been one of the most generous among states. The Centennial state mailed a $750 stimulus check for individuals and double that went out to virtually all its taxpayers under the Colorado Cash Back program.

The administration revealed that providing direct stimulus checks to families was the most impactful way to support state families. The money is not part of a normal stimulus check payment but is made possible through an amendment to Colorado’s Taxpayer’s Bill of Rights (TABOR) which requires the Colorado government to return excess state revenues.