Huge push by economists to get Congress to pass more stimulus checks

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We are starting to enter crunch time for the next round of stimulus checks.

As more shut downs emerge and as families continue to struggle with economic recovery in many parts of the country, there is a growing need for immediate government relief.

Just about every top lawmaker or government leader has come out in support of some level of stimulus relief.

But now, we’ve heard from a large group of over 125 economists who have called on Congress to send out more direct payments to American families.

“We urge policymakers to use all the tools at their disposal to revitalize the economy, including direct cash payments, which are one of the quickest, most equitable and most effective ways to get families and the economy back on track,” the economists wrote in a letter published yesterday.

Some of the signatories included Jason Furman, a top economist for former President Barack Obama, Alan Blinder, a former Federal Reserve board vice-chairman, and Claudia Sahm, a former Fed economist.

A recent study published by the Center on Poverty and Social Policy at Columbia University in June showed that without the passage of the first round of stimulus aid, the nation’s poverty level would have surged from 12% to 60% which would have been on par with the 2008 financial crisis.

“While the economy continues on the path to recovery, it’s critical that we quickly implement a robust stimulus to help promote a sustained and racially equitable recovery and help families and businesses get back on their feet,” they wrote.

While some people have disputed the efficacy of stimulus checks versus other types of aid such as unemployment benefits, it looks like there is a large body of evidence suggesting that the stimulus checks do work — at least to a large extent.

Other studies have shown that some people do pocket these checks and put them into savings (which does not stimulate the economy) but those people are in a pretty small minority.

The interesting thing about stimulus checks is that we have seen a lot of support from both sides of the aisle in Congress and clear support from the White House.

Yet, the stimulus checks have been left out of the skinny stimulus packages that were proposed by Republicans on multiple occasions.

Therefore, while I still think it is likely that more stimulus checks will go out, if Republicans maintain control of the Senate, it’s not clear that more stimulus checks are a guarantee.

Hopefully as more notable economists and experts make a push for more checks, more members of Congress will get on board and these checks will become a reality in early 2021.

H/T

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