Twelve hundred dollars is a decent chunk of change.
But will it offset the crushing impact of the coronavirus for Capital Region residents?
The U.S. economy is cratering, unemployment claims are skyrocketing, small businesses face an uncertain future and, even more worrisome, it’s unclear when the shutdowns and closures that have characterized the past few weeks will come to an end.
The $2 trillion stimulus package signed by President Donald Trump on Friday will provide most Americans with one-time direct payments in the hopes of keeping families and businesses afloat during what’s shaping up to be a prolonged crisis.
While extra cash is always nice, how far will the stimulus money really go?
Will it be enough to prevent a deep and lengthy recession?
After all, the cost of housing alone will eat up most, if not all, of a single stimulus check. For those who are newly unemployed, or dealing with a sudden and unexpected drop in income, the money from the federal government is little more than a band-aid on an open wound.
That doesn’t mean it won’t be helpful.
Jonas Shaende, chief economist with the Latham-based Fiscal Policy Institute, said the one-time stimulus payments are “a good way to supplement income and boost the local economy.”
Even more helpful, he said, is the help for the unemployed contained in the stimulus package, which provides an extra $600 a week, on top of state unemployment benefits, to those who have lost their jobs. In New York, unemployment maxes out at $504 a week, which means those workers would now receive checks worth about $1100, plus the one-time stimulus payments.
That’s a big deal - and should be a big help.
But that extra $600 per week will only last for four months, at least right now.
If the recession is deep and long, that won’t be enough to prevent laid-off workers from falling into financial ruin. That’s why some members of Congress advocated for recurring payments; Vermont Sen. Bernie Sanders called for monthly checks of $2,000, a proposal that was ultimately rejected.
“There’s going to be a need for more stimulus,” Shaena predicted.
The question, I suppose, is whether lawmakers will get their act together and pass another stimulus bill if it’s needed.
I hope they do, but my expectations for Congress are not especially high at the moment.
In any case, the answer will probably arrive in the next couple months, after we’ve had a chance to take stock of the damage caused by bringing the economy to a standstill.
These shutdowns will save lives, but that doesn’t mean there’s not a cost to imposing them - one that must now be addressed in the form of a costly stimulus package.
The stimulus package will provide most adults with $1,200, and children with $500.
Single adults with an adjusted gross income of $75,000 or less will receive the full amount, while married couples with no children earning $150,000 or less will receive $2,400.
The payments decrease and eventually stop; single individuals making over $99,000 and married couples making over $198,000 won’t receive any money. The earnings limit is $146,500 for those who file taxes as head of household.
Most of us can think of ways to spend an extra $1,200, and at a time of great uncertainty, it’s nice to have on hand.
But it’s quite likely that more will be needed, sometime soon.
And when that day comes, I hope Congress does what’s necessary to help people who are suffering through no fault of their own.