Second stimulus checks should be recurrent and direct, urge 156 renowned economists

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156 economists from dozens of leading universities across the country wrote an open letter to policymakers urging them to “use all the tools at their disposal to avoid further avoidable harm to people and the economy, including stimulus payments direct recurring, until economic recovery ”.They called for:

  • direct cash payments to families
  • expanded and improved unemployment benefits
  • substantial aid to state and local governments
  • stronger SNAP benefits
  • solid funding for child care and more

With unemployment at historic levels, it is clear that the Americans of the country are suffering severely. The economy is in recession and an estimated 17.6 million unemployed Americans will not return to their jobs before the pandemic.

Many hope that a stimulus check similar to that of the healthcare law will soon be carried out.

The letter offers no figures in terms of the amounts or frequency of stimulus checks, but simply argues that “sustainable direct stimulus payments will stimulate consumer spending, stimulate the economic recovery and shorten the recession.”

MORE FORBESSecond update of the stimulation check: here’s everything we know right now

Consumer spending represents a large part of the US economy. As we saw with the US Census Bureau report on how Americans spent their stimulus checks, almost 60% of them spent it or would mainly spend it on spending. When the median income in America is only $ 63,179 (2018), getting a single refundable tax credit of $ 1,200 is a big boost. Getting more than one would be helpful, especially if you’re unemployed.

The question was never whether stimulus would help the economy, no one objected, it was always whether legislators were willing to pass a bill with a huge price.

This last letter follows a previous letter from 150 economists, including Ben Bernanke, former president of the Federal Reserve from 2006 to 2014. This letter quoted a statistic of which the number is very familiar – $ 40,000:

“And among those working in February, almost 40% of those in households earning less than $ 40,000 a year lost their jobs in March.”

It is possible that the Leader of the Senate, Mitch McConnell, in suggesting that the next round of stimulus checks be sent only to people earning less than $ 40,000, uses this same statistic to establish his income limits.

We will have to wait a little over a week to see what the next stimulus checks will look like.

Additional Resources

Next federal unemployment benefit of $ 600 likely to be smaller

Second update of the stimulation check: here’s everything we know right now

Where is my tax refund? Why it can be late and when to expect it

The IRS will pay interest on your “late” tax refund

The chances of a second stimulation check are even better

President Trump: Next stimulus bill will be “very generous” and announced in a few “weeks”

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