The stimulus checks developed during the pandemic created major impacts on the economy. The stimulus check is whereby the payment is made directly by depositing and using paper checks to the taxpayers. The US government offered the payment during the financial stress. These payments were essential as they increased confidence and boosted spending among consumers. Thus, the economic stimulus created a major effect on the economy.
The enactment of the stimulus check boosted consumer spending and personal income. The payment offered under the Consolidation Appropriations Act was given out in January 2021 (Schild & Garner, 2021). The data collected illustrated that consumer spending increased by three percent and personal income increased by ten percent (Schild & Garner, 2021). Increased spending, consumer savings, and personal income improved economic growth development during this period.
The stimulus checks introduced during the COVID-19 19 pandemic greatly affected the household. Many people got help after their employment opportunities were shut down. While covering the delays and gaps in payments, the household was also affected. The EIP programs offered immediately and directly supported the households, including delayed insurance and unemployment benefits (Li et al., 2021). Thus, people access the benefits they utilized during the period, thus boosting the economy.
The implementation of the stimulus check was worth it in the financial system. The stimulus check resulted in greater economic development and growth. The CARES Act enacted the stimulus check that boosted the nation’s economic output by 0.6% in 2020 (Safir et al., 2020). Also, people benefitted by accessing the support they wouldn’t get in other financial sectors. As a result, applying the stimulus check was a positive move as far as the economy was developed.
In conclusion, the stimulus check affected the economy positively. Many people increased their spending habits and personal income, which boosted the economy. Also, the program directed some cash in the households, which enabled people to get support as other systems were delayed or inefficient. The stimulus checks were worth the venture as far as the economy is concerned and thus could be used later during similar periods of economic hardship.
References
Li, K., Foutz, N. Z., Cai, Y., Liang, Y., & Gao, S. (2021). Impacts of COVID-19 lockdowns and stimulus payments on low-income population’s spending in the United States. PLOS ONE, 16(9), e0256407. Web.
Safir, A., Garner, T. I., & Schild, J. (2020). Receipt and use of stimulus payments during the Covid-19 pandemic: Beyond the Numbers: US Bureau of Labor Statistics. Web.
Schild, J., & Garner, T. (2021). Pandemic and the Role of Subjective Assessments of Well-Being: A View from the US Using a Rapid Response Survey. Web.