While it was at first dismissed out of hand, a second stimulus check is now being discussed as a real possibility by the Republican Party. What would a second stimulus check entail? And is phase 4 even something that needs to be in consideration?
First, we have to examine the facts about the stimulus that is still being implemented. A second round could be a harder sell than you think. There are also long-term financial consequences for massive government programs like this.
Here’s what you need to know:
The First Stimulus Check is Still Going Out
Approximately half of the Americans who are going to get a stimulus check have already acquired theirs. But those who haven’t gotten it yet may be waiting for some time. Many of those who haven’t received their stimulus payment yet are people who needed to update their direct deposit information, or are people who need a paper check. Because of this, they may not see their payments until well into May.
For paper checks, they are going out relative to household income. Those who make the least will get them the first.
Is $1,200 Enough?
When the stimulus check was being discussed, it appeared that the country would mostly be open by the end of April. However, it appears as though many areas may not be open again until the end of May. The economic damage is currently unknown, and it’s impossible to say how many businesses are going to survive the pandemic. With that in mind, the one time $1,200 stimulus might not be enough.
There are a few options that are being considered, such as cutting payroll taxes for employees. This encourages employees to keep working, but it may not be enough respite for those who haven’t been able to work. Pelosi is interested in boosting the average American’s income by $2,000 a month until the economy has recovered. And follow up stimulus payments have been suggested.
On April 6, President Donald Trump stated that they were seriously considered a second round of payments. This hasn’t yet been discussed seriously, but it’s an idea that is being floated by many. It’s highly unlikely that any form of UBI or any static, monthly payment will be passed.
Addressing the Working Poor
A major issue right now is that people on unemployment are making more than about half the population of America. In some areas, unemployment is now at approximately $24 per hour, which is something that businesses simply can’t compete with. Because of this, people aren’t inclined to go back to work, and those who are still working feel as though they are losing out by doing so. Another second round payment would at least help those who are still working, rather than only those who are unemployed.
Whether America really needs a second stimulus is likely going to be determined by how May goes. If the rest of the month goes smoothly, people may be returning to work soon. If it goes poorly and the economy is shut down again, then it’s very likely that many businesses will close, jobs will be lost, and another stimulus payment will be needed.
The government has shown itself as being open to the idea, but because all of these issues are bipartisan in nature, it requires that both Democrats and Republicans come to an understanding.