The Stimulus Checks Probably Won’t Do Much

A customer holds $100 notes in a file photo. Adek Berry/AFP/Getty Images

Commentary

More than 170 million Americans are supposed to receive stimulus checks intended to temporarily offset the damage the CCP virus has done to the economy.

Many in the country were to receive stimulus checks this past week, but it’s clear, based on how it went, the system malfunctioned: Many Americans who desperately need them haven’t gotten them and Americans who aren’t in dire need of extra funds have gotten them or will.

As well-meaning as it is to pass out up to $1,200 or more to a significant portion of the U.S. population, I fear that in addition to being a flop as it rolled out, it might not help in the long run either.

First, politicians, in all their wisdom, decided the stimulus checks would go to the following people: single people who have filed tax returns reporting an annual adjusted gross income of less than $99,000, or if a person filed as the head of a household and earn under $146,500, or if you file jointly without children and earn less than $198,000. Parents with children under 18 will get $500 per child.

At first, this excited some people (I mean, who doesn’t like “free” money?), but right away, folks started reporting that even though they qualified, they weren’t seeing their checks.

While there’s a website that folks can visit to see if their stimulus checks are incoming, I’m seeing many on social media reporting that the site seems glitchy, or it says it isn’t able to find them in the system, or uses some other confusing language.

I can’t say that I’m surprised a government the size of the United States botched something of this magnitude. To be fair, it would have been a difficult task for anyone to accomplish, even the private sector. But then, that should have been one of the many clues that a stimulus check for 80 million wasn’t going to go well.

Then there’s the issue of the amount: If you lost your job, $1,200 for a single person or $3,400 (for a household that includes a mom, dad, and two kids) might cover a month’s rent or mortgage and utilities and a month’s worth of groceries and gas. In some states, it won’t even cover that. As an investor friend told me over text, “It’s too little, too late.”

In an effort to get the money to needy Americans quickly, the government in all its wisdom decided to just give it to people based on their 2018 or 2019 tax returns. By doing this, the chances of stimulus checks going to Americans who aren’t currently hurting financially is high.

I know people who made little in 2018 or 2019 only to get a raise in 2020 to the low-six figures—and they’re still working, as far as I know. Yet if a person did well for themselves in 2018 or 2019 but lost their job two months ago due to the economic effects of the CCP virus, they won’t get a check at all and could probably use it, at least as a Band-Aid.

A better idea would have been to simply give it to those who filed for unemployment from March until July. The stimulus wouldn’t only have gone to far fewer people but at least we also would have known without a doubt that it did go to people who needed a financial boost.

Then there’s the complex but troubling issue of whether this will even help the overall economy at all. Of course, this isn’t a “stimulus” in the classic sense—this is meant to help a person survive by paying rent or their mortgage, not to actually “stimulate” the economy. How could it?

The author of an article on market news website CCN says: “Assuming that 80 million people receive the checks, this would in theory pump around $96 billion into the U.S. economy. Of course, not everyone will spend all the money they receive. On top of this, the economy will lose trillions because of coronavirus.”

A CNBC article reports that Americans are spending their stimulus checks on essentials such as food and gas. Since spending has decreased anyway because everything is closed, it’s not like there’s a surplus of funds circulating in the economy. There certainly isn’t more money stimulating the economy than before the CCP virus hit.

A stimulus check for Americans trying to survive this swift economic downturn might have been a good idea if had been rolled out in a more efficient way to people who really need it—and if it could have ever had the chance to stimulate the economy that greatly needs it.

Nicole Russell is a freelance writer and mother of four. Her work has appeared in The Atlantic, The New York Times, Politico, The Daily Beast, and The Federalist. Follow her on Twitter @russell_nm.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.