Because of the CARES act, American citizens were provided with the means to receive cash transfers of up to $1200. The amount was intended to meet their demands amid the pandemic.
Now, millions of Americans want to get a second round of stimulus checks. However, Congress hasn’t decided yet on what the next version of the COVID-19 stimulus legislation will be.
It still needs to be approved
If you were to ask House Democrats, they’d want another batch of checks to be extended to qualified Americans. That’s established on the HEROES Act, which was put to the law in May. Those fees would be like the first round that’s $1,200 per person or $2,400 per couple.
This time around, qualified dependents would likely get $1,200, which increased from $500, for a maximum of three per household. However, the plan still needs to be approved by Senate Republicans and President Donald Trump.
Some economists don’t like this idea…
In the meantime, discussions about the second COVID-19 stimulus package have alternatively been directed to whether or not enhanced unemployment benefits should be extended and whether back-to-work bonuses would work. Generally, some economists aren’t keen on granting another full set of stimulus checks.
According to Finance Professor Stijn Van Nieuwerburgh of Columbia Business School, there truly is a dire need for more aid from the government, with how the economy is playing at the moment. However, he adds that he’s just not sure if it should be in the form of stimulus checks since they aren’t well targeted to those in need of them the most.
While others beg to disagree
Despite these concerns, other economists have a different opinion on the matter.
According to economists from the University of Chicago, Northwestern University, and the University of Southern Denmark, with the amount of the 2020 stimulus checks, they expected huge impacts on the likes of auto spending, appliances, electronics, and house furnishings.
Instead, individuals seem to be more concerned with spending their checks to catch up with payments for bills and rentals. Citizens have also spent more on food, personal care essentials, as well as nondurables.
So, how were the first stimulus checks really used in 2020?
Researchers looked at the habits of over 1,600 individuals when it comes to spending and saving. These participants got their stimulus check on April 21 in an estimated 6,000-person sample. In the end, the researchers discovered:
• During the first three days since the stimulus check was released, spending had boosted between $50 to $75 each on items like food and nondurable goods, which is a category that covers stocks like laundry detergent, paper, pens and other things with a shorter life span.
• At that same period, the acquisition of durable goods rose by $20 during those initial three days. This category covers vehicles, furniture, appliances, and other items intended for long-time use.
• Overall, households used up about a quarter to one-third of their stimulus check funds in just ten days after it was received.