More stimulus packages are being discussed and proposed every week. The most talked about proposal, the “Monthly Economic Crisis Support Act,” has been from the Democrats and it’s one that offers $2,000 in monthly checks and even more for those with families.
Republicans are not necessarily on board with this proposal and from their side there have been a lot of talks about payroll tax cuts that would presumably allow companies to re-hire employees and perhaps pay them higher wages.
But there is a new proposal which would allow Americans to receive up to $5,000 instantly but it will come with a catch.
It’s also proving to be pretty controversial.
This new proposal is being discussed by senior economic officials at the White House and was initially introduced by conservative scholars at the American Enterprise Institute and Hoover Institution.
This new stimulus proposal is essentially a loan that Americans would be able to take out of their future Social Security payments.
In exchange for the up to $5,000 in direct payments, they would be giving up (or just delaying) the first three months of their Social Security payments and would also have to pay a nominal interest rate — perhaps somewhere around 1%.
This would be a way of avoiding more deficit spending by the government, as there is $38 trillion in currently accrued Social Security benefits that have not yet been received by households.
In addition, the interest rates would allow the government to recapture funds while allowing Americans to receive loans at much lower interest rates than they likely would otherwise.
But a lot of people are worried about the implications of this proposal.
First, there is concern that this initiative would just be a precursor to getting rid of Social Security altogether. People question the motives of those behind this proposal.
Also, many people depend on Social Security income for their primary income source. According to the Social Security Administration (SSA), 44% of all unmarried and widowed women get 90% or more of their total income from Social Security.
Many people are also in desperate financial situations where they would not hesitate to take up a $5,000 loan since it would provide instant relief.
Therefore, a lot of people see this as setting up Americans to face an extremely difficult financial situation down the road where they have no income for one quarter and will be forced to struggle to survive.
Consider the financial situation that many people are in right now and that the lockdowns have not even been going on for three months. 90 days can be a very long period without income.
If a proposal like this goes through, I would advise people to use a lot of caution before they opt in. This would not be a mandatory thing and choosing to opt in would need to be a major decision.
Would you take this $5,000 loan if you had the opportunity?
Daniel Gillaspia is the Founder of UponArriving.com and the credit card app, WalletFlo. He is a former attorney turned travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in publications such as National Geographic, Smithsonian Magazine, and CNBC. Read my bio.
You law makers sound stupid as fuck, you say the tax payers money well its we the taxpayers demanding access to our money….send out another stimulus and miss us with all this extra bs.
I hear a disability complaint with AARP COMING WITH THAT STUPID ass idea, and i think AARP should step in cause i will protest in front of the White House if you think i will let that happen.
No I’m totally against that SS idea. I’m on disability and I would just get more in debt than I already am and starving too. You White House people are supposed be there for the people that’s why you were voted into office. If you people don’t give us the stimulas you wrote up the 2,000.00 per month untaxed you won’t get my vote. You gave businesses billions of dollars you can help the little men and women during this pandemic.
This sounds like a great life line for all of us that are suffering for this pandemic. We are In need of help.. but the Republicans do not seem to care or are not listening.It seems to be life against money. It should be life, were hurting
Thank you Nancy Palouse for fighting for all of us.
I think all Americans could use the second wave of checks for 2.000
On social security still no stimulus in the bank. Where is it.
I am struggling with SSDI as it is. I pay for Medicare and a secondary that I must have to cover my health conditions. I get 16.00 a month food stamps. And yes I am legit disabled. Its scarey what’s gonna happen.
What if you owe back child support.
This sounds like a bad idea and a very desperate one at that. Leveraging your Social Security? Please I beg no one to take this option if it actually passes through congress which I doubt it will.
Maybe another stimulus payment will help, but I think the best thing would be for this country to get back to work. Let’s open up, compromised people stay home, and let’s get the economy back on track. We can’t print our way out of this mess.
BTW, Thanks China!
When I’m entitled to s.s. in 7 yrs. It will be 100% of my income. There won’t be enough for medical and heat or air bills if I want to have it. I definitely won’t have money to pay for a loan and if they take out of check for medical then food goes too. I will not accept anything that I have to pay for more than necessities