The federal administration sent out multiple stimulus checks to US citizens during the pandemic, and it helped many families sustain themselves during the long difficult period. We are now into the third year of the pandemic and though it continues to disrupt many sectors and impact the economy, the situation is much improved, thanks in large part to the federal administration.
The nation was in the middle of severe depression when COVID-19 first affected the US in the first quarter of March 2020. The redundancy rate was at its highest at 14.7% since the Depression close to a century ago. The most affected were the low-income groups who lived paycheck to paycheck. They were unable to meet their financial obligations the moment they lost their job and were already devoting their salaries to everyday expenses.
The federal government initiated multiple stimulus checks to help people tide over the economic downturn instigated by the pandemic. The last stimulus check, the third, was signed by President Biden in March 2021 under the American Rescue Plan Act and helped out people through the EIP, advance Child Tax Credits, and tax refunds.
Individuals, Families, And Businesses Benefited Directly Through The Stimulus Checks
Many businesses were directly aided by this Act. The immediate impact of the payment was remarkable. People instantly benefited from this advanced support. Instead of going for tax refunds, the administration realized that direct stimulus checks could both help the people in real need and also kick-start the US economy.
The stimulus check payments led to a 3% spurt in consumer spending along with a 10% growth in individual income.
The rate of personal savings rate went up to 20% last January from 13.5% a month earlier. American economic output rose by 0.6% while the rate of poverty was down at 9.1% for 2020. That was the lowest ever since the estimates were initiated.
Around 6M children could stave off poverty, 3M of them thanks to the monthly Child Tax Credit relief.
