Why I'm Against the Current Plan for Stimulus Checks
That title is probably pretty contentious, right? I'm sure it will raise some eyebrows and people will ask, "What's this guy's problem, doesn't he want to help those in need??" Before we all jump to conclusions, let's not forget that respectful debate is the basis for learning other perspectives, and ground for learning the mindsets and experiences of others. Maybe I'll learn something, maybe you will, and maybe we'll see our points from a different vantage point! This post, like all, is meant for informational purposes only and includes opinions of the author only.
Now, I am not against stimulus checks entirely. I am just against the blanket distribution of them to each and any person within those income limits. First of all, we see that the stock market is doing exceptionally well, and the housing market is hitting records as well. People sure are optimistic and have a lot of money! Now, you might argue that the stock market is not the economy, and you'd (mostly) be right. However, remember that two-thirds of the economy is dependent on consumer spending. So, as we see stocks do well, such as retail, online shops, and even travel, that means that their revenues are improving, which means people are spending.
However, let's take the stock market and housing market out of it. Many people as we know are truly struggling, they've lost their jobs, incurred increased expenses, or have fallen behind after having their hours or pay reduced. Those people we surely need to help. My understanding though is if people are struggling, we should fund food banks, increase SNAP benefits, and extend mortgage/rental forbearance, much of which is already being done. This might not be enough for some people, as they haven't been able to save being stuck in low wages, so maybe the stimulus will truly help them.
Keep in mind too, that the savings rate increased substantially last year. According to CNBC, the personal savings rate hit a record high of 33% a few months after the pandemic. So, if people are saving so much, and they don't have many places to spend money they usually would such as theaters, concerts, or catered parties, where would they spend the stimulus? According to one source, a working paper of the National Bureau of Economic Research, it seemed those on the higher end of the income scale that received the checks tended to save their stimulus checks or pay down debt, rather than spend. Those on the lower end of the income scale, those with less "liquidity" or savings/cash on hand, did tend to spend their checks, possibly on things like gas, food, medicine, etc. Those people should absolutely get the help they need, and thus that will immediately help the economy.
Further, there are so many loopholes with just blanketing everyone who makes $75,000 (single) or $150,000 (married filing jointly). I know of many people who received these checks and didn't need them, nor did many of them spend the money. For example, a 20-something woman who lives with her well-off parents, has no expenses, and works from home doing digital marketing, received this check. She doesn't need the money, and so saves it for her down payment house fund. Her brother uses it to buy a bunch of Apple products, and I don't think they're hurting for money. Not a bad idea, but is that why the government is going into debt? Even worse, some of these people have trust funds, but that's not looked at for stimulus check eligibility.
I know of others who are retired, with over a million dollars in retirement accounts and multiple paid-off properties, who would receive $2,800 on top of what they already received because their Social Security and pension income come in under $90,000 per year, and that's more than they normally spend anyway. Then there are those that live with their children, have little to no expenses, and just put that check into savings. And what about the attorney in the MidWest earning $150,000 per year with a stay-at-home wife (by choice) and one kid, using the funds to buy himself a fancy European watch? On top of that, he got a $700,000 inheritance a little over a year ago. Yup, they sure are in need. Oh, and don't even get me started on "freelancers" who barely worked 5 hours a week and raked in maybe $500 a month at best, now pulling in Pandemic Unemployment Assistance, with no intention to work in that endeavor again.
These are just some examples of taxpayer dollars going to waste. Yes, there are people who need this money and are using it for its intent. However, there are many others who fall into the income limits and don't need the money, weren't impacted by the shutdowns, and don't really have anywhere to spend as they've been saving so much already. Let's help those who need it by closing these loopholes and reducing the income limits to make sure we balance economic stimulus with personal and fiscal responsibility.