Checks to U.S. households could provide stimulus after COVID-19 downturn
Share Now on:
There’s a multi-billion-dollar plan to massively stimulate the economy during the COVID-19 epidemic — by sending checks to most American households. It could be a key part of the up to $1 trillion economic stimulus bill being negotiated by Congress and the White House.
Senators have floated numbers ranging from $1,000 to $2,000 per adult. Treasury Secretary Steven Mnuchin said he wants checks to go out “in the next two weeks.” So how would this all work?
Sending a bunch of money to American consumers isn’t all that complicated for the Treasury Department and IRS, according to Louise Sheiner, policy director for the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
“The government has everybody’s information from W-2s and tax returns and so they actually send out checks or deposit electronically into people’s bank accounts,” Sheiner said. “Whether or not it’s a certain amount per adult, per household, per child, however they decide to do it.”
But getting money into people’s hands right away could be a challenge, according to Douglas Holtz-Eakin, who served on President Bush’s Council of Economic Advisors and is currently president of the American Action Forum.
“We’ve done this twice before — in 2001 and 2008,” Holtz-Eakin said. “It’s not particularly fast. It’ll take six weeks at a minimum to get this set up and executed. It’s not particularly efficient — people don’t update their records, and there are a lot of checks that will not find their intended recipients.”
He said it might be hard for consumers to spend stimulus checks right now. But Sheiner said that’s OK — the money will boost the economy after the epidemic has passed.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
Give today and get our limited edition tote.