If you have received your full installment of stimulus check from the federal government, be assured that it is the last you have seen for some time to come. Joe Biden is too tied up in infrastructure building and further direct payments are the furthest from the mind of both the ruling Democrats and the Republicans. But states are stepping in to help out their residents with inflation relief measures for their residents.
The US reeling from a record inflation rate that has thrown low and medium-income groups into the sort of desperate situation seen immediately after the pandemic. The federal government stepped in immediately after the economy went into a downturn and unemployment figures rose to dangerous levels, close to the 15% mark.
The successive stimulus checks beginning with the $1,200 payment in April 2020 went directly into the handle of Americans bypassing the typical bureaucratic bungling that has made ineffective past measures. The IRS and the Treasury Department rose to the occasion and ensured that people would not have to struggle to put food on the table or fear being evicted from their homes.
Despite people losing their jobs in millions, the number of loan repayment defaults went down during the pandemic period thanks to the fact that people were flush with funds during the difficult months of the pandemic.
For the first time in decades, credit card dues and other high-interest debts even went down. The savings rate also rose significantly, especially after the economic impact payment, the third stimulus check, of $1,400 was declared in March 2021, immediately after the second payment was released in December 2020.
Families who were used to living paycheck-to-paycheck found for the first time that they had a surplus income in their hands. This was also because people were back in their jobs by the time the third stimulus check payments began to hit their bank accounts or drop into their mailbox.
The Extra Funds Meant A Greater Demand Of Goods Across The Nation
The extra money meant that people began buying up more goods than they even bought or could afford. People for the first time spent more on goods than on services even as the supply chain issues and the war in Europe threatened to derail the smart economic recovery witnessed in the last two quarters of 2021.
The excessive demand could not keep up with the diminishing supply for the above two reasons and this was compounded by the heavy shortage of workers. This shortage was a result of people fearing coming back to work as variants of the virus kept surfacing in America and taking lives. People still had not fully placed their trust in the vaccines introduced and decided to play it safe, especially as money was not a problem in the intervening period.
The extended unemployment checks and the partial payment of the enhanced Child Tax Credit stimulus check between July and December 2021 continued to give people free money despite the end of federal stimulus checks.
Despite the end of the stimulus check payments from the federal government, people continued to get stimulus payments for a variety of reasons. They include the birth or adoption of a child in 2021, giving families an extra stimulus check of up to $1,400. A fall in income in 2020 also ensured that millions who were not previously eligible for a stimulus check based on their 2019 returns suddenly found that they would also be receiving a fresh stimulus check.
The Biden administration also pumped in hundreds of billions to shore up the economy by funding businesses and preventing them from shutting down.
States, local and tribal bodies received generous money from the federal administration under the American Rescue Plan Act.
States Flush With Funds From Double Sources
States enjoyed a double bonanza during the second and third quarters of 2021. While they received a large sum of money under the ARPA scheme with the freedom to spend it on various measures, there was a stunning economic recovery in the second half of 2021. But at the turn of the year, the states were flush with funds from these dual sources.
The excess funds have encouraged states to move forward with their plans to help their residents. Though the payments are not as generous as the federal funds, some states have almost matched the federal stimulus checks.
California and Florida are the latest among states to declare stimulus checks for their residents. These two diametrically opposite states have come up with measures that will help their residents cope with the high inflation rate that threatens to derail the economy and lead to a recession.
But while the Democrat-controlled California has been openly generous with the payments and plans to send stimulus checks to over two-thirds of the population, The Republicans in Florida have been customarily cautious and will send a $450 inflation relief payment to around 60,000 residents of the state.
The payment declared by Ron DeSantis will only go out to parents of children in Florida, including children adopted. Both related and non-related caregivers will also receive the amount from the state.
California, on the other hand, will send out payments to all citizens who are eligible based on their income. Families could get up to $1,050 if their annual income is $75,000 or less while families earning as much as $250,000 will also get a stimulus check, though the amount will be considerably less.
Most states will send out payments in the last quarter of 2022 though Maine and New Mexico have already started sending out stimulus checks to residents from June 2022. Maine has been among the most generous in its payment with families filing jointly and earning below $75,000 getting a stimulus check of $1,700.
New Mexico is giving payments spread out over three months starting June 2022. Other states sending out stimulus checks include Pennsylvania, Illinois, Massachusetts, Oregon, Virginia, Hawaii, New York, South Carolina, Colorado, Georgia, Delaware, Idaho, and Connecticut.
Despite fears of renewed inflation fuelled by the state stimulus checks, supporters of this scheme say that the amount is too small and spread out to have any significant effect on rising prices. Instead, it will help out residents at a time they need the support of the government the most.
