Are $2,000 checks really needed?

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We are now patiently waiting for President-Elect Joe Biden to reveal his coronavirus proposal this Thursday.

This proposal is expected to be in the trillions of dollars and appears like it could be an extremely comprehensive bill.

We’ve even heard some discussion about it containing measures that would have profound effects on people financially such as raising the minimum wage.

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One measure that we are expecting to see included is another round of stimulus checks. These checks could be priced at around $1,400 to $2,000 we still don’t know for sure.

But do we really need the stimulus checks or will lawmakers have a case against them?

According to Biden and some Democrats, it seems the economists they are listening to believe these checks are necessary.

“The overwhelming consensus among leading economists left, right and center is that in order to keep the economy from collapsing this year and getting much, much worse, we should be investing significant amounts of money right now to grow the economy,” Biden said.

“We need more direct relief flowing to families, small businesses, including finishing the job of getting people that $2,000 relief direct payment.”

Stimulus checks have been criticized for not being the most direct route to get funds to people who need it the most. Compared to unemployment benefits, stimulus checks may not be as efficient.

But that doesn’t mean that they don’t play a huge role in helping to save the economy from collapsing.

Only a small percentage of recipients put these checks away into savings and most do inject their funds into the economy, thus helping to stimulate economic activity.

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The latest US Labor Department report also makes a case for more stimulus checks.

In December, we saw 140,000 jobs lost which was the highest monthly drop since April and we know that the spring of 2020 was an utter disaster in terms of employment.

The unemployment rate in December was at 6.7% and the number of unemployed individuals was at 10.7 million.

That is not as bad as the peak of the pandemic but keep in mind that these numbers are still nearly twice what they were before the pandemic back in February 2020.

And that month we saw 3.5% unemployment and only 5.7 million unemployed individuals.

So unemployment is still very bad compared to where it was before the outbreak of the virus.

Obviously unemployment benefits will help the unemployed but if you are using unemployment as a gauge for where the economy stands as a whole, I think it makes the case to at least entertain more stimulus checks.

Even if people are not considered unemployed today, they may still be recovering from months of depressed wages so you have to take those people into account.

But with the unemployment figures and the White House already having their own team of economic experts who believe in the effect of more stimulus checks, I think there is a strong case that there will be enough data to support issuing out more checks when the new Biden bill is getting put together.

H/T

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