Will A Stimulus Help The Economy?

Those who only follow the stock market are confused by emergency measures to help the economy since the stock market is at a record high. However, the stock market doesn’t reflect the economy for three reasons. Firstly, public companies in trouble can issue cheap debt and shares if they have to. That opportunity is not afforded to small firms. Secondly, the stock market is dominated by software stocks which have benefited from this new economy. Thirdly, the stock market is looking forward to when the vaccines save the economy. That makes sense, but in the meantime, people are in big trouble.

The initial bipartisan Senate proposal allocates $908 billion to help people. The plan calls for $300 in additional weekly unemployment benefits, $300 billion in PPP, $250 billion in help to state and local governments which have been laying off teachers, a temporary liability shield (limitation of COVID-19 related lawsuits against businesses who follow public health guidelines), and $50 billion for vaccine distribution. There won’t be another round of stimulus checks in this stimulus. However, if the Dems win the Senate by winning the two Georgia seats up for grabs, another round of checks might come.

ing in households where it has been somewhat or very difficult to pay for usual household expenses during the pandemic. Over 1 in 10 people are in households where there was either sometimes or oftentimes not enough food to eat in the last week. One-third of adults expect income loss in the next month (this is all from the household pulse survey). It’s pretty clear from this data a stimulus is desperately needed despite the continual record high in stocks.

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