The Stimulus Is Finally Here

Congress finally passed a stimulus. We have been waiting for one since October. Most didn’t think anything would pass initially, but also it seemed improbable that people on unemployment would be left out to dry. What really pushed Congress in the direction towards getting a deal done was the weak November BLS report which was caused by the latest wave of COVID-19. 

Anyone who doesn’t live in a bubble knows people are hurting and it’s common sense that the data will get worse from November because the shutdowns are deepening. There has been a lot of pushback about giving people only $600 checks. That would have been amplified if nothing passed.

The Details Of The New Law

Stimulus checks are $600. They are going out to individuals who make less than $75,000 per year and couples who make less than $150,000. Dependents will be getting $600 as well which is actually $100 more than the first stimulus. The checks will shrink as people earn more money. People who make $100,000 per year or more won’t get anything. The hope is the checks can go out early next week. Therefore, we could see a boost in spending in December.

The timing is off because the money can’t be used for Christmas gifts. That being said, many people using the money will be buying basic necessities because they are experiencing financial hardships. These checks won’t save people, but unemployment benefits will help. Cynics will say these stimulus checks will go into story stocks. 

For gig workers, there will be a $100 boost in unemployment checks which is better than the $0 given last time. For everyone else, the benefits are $300 per week for 11 weeks, but they might not start immediately on December 27^th. States’ unemployment computer systems are terrible. 

Remember, in the spring when Florida had people waiting outside on long lines to apply for benefits which could have spread the virus further. Many state governments are living in the 20^th century. These benefits are about 85% of typical incomes (without the $300, it’s 50%).