The end of the federal stimulus check in 2021 coincided with rapid growth in inflation rates. Even in the last quarter of 2021 even as the Child Tax Credit stimulus check payments were coming to a close, the price of goods and services began to rise rapidly across sectors. From groceries to gasoline the increase was swift and brutal, especially for low- and moderate-income Americans.
Over 20 states stepped in to help out residents and inflation relief stimulus checks went out rapidly. From Florida to California, state governments stepped in rapidly and sent out inflation relief stimulus checks. They were helped by funds from the American Rescue Plan Act funds sent to states and other local government bodies.
A sustained boom in 2021 also helped state governments with a huge budget surplus that was diverted in part toward paying these stimulus s checks. the payments wren most one-off stimulus checks in the form of bank transfers, paper checks, and tax rebates. Some states even gave sales tax waivers and pre-paid debit cards to help out residents.
But the amount was nowhere near the scale of payments from the federal administration. And receiving a one-time check, residents soon were out of funds even as the pandemic-induced financial crisis continued to beset Americans.
Stimulus Checks Substantially Reduced Hardship
Researchers have found a sharp decline in food shortages, financial instability, and emotional and mental imbalance with the introduction of multiple rounds of stimulus checks. It brought about a rapid change in the lifestyle of millions of Americans.
And despite the end of the economic impact payments, there were the extended unemployment stimulus checks and the expanded version of the Child Taax credit stimulus check.
For the first time, many American families gave their children three meals a day. This resumption of old habits helped children get three meals a day, a luxury for most low and moderate-income Americans, especially after inflation reached record levels.
The huge experiment, unprecedented both in its breadth and scope, proved hugely successful though there were the expected side effects of such a huge experiment.
There was also the issue of the payment not reaching the most deserving of citizens, those who suffered the most during the pandemic.
But the huge inflow of cash to the grassroots level of the economy did succeed in stimulating the economy. And prevented what would have been mass starvation. It helped people put food on the table, pay their water, electricity, and other vital utility bills, and afford the better treatment which till then had only been a pipe dream at best for low-income Americans.
But skeptics, especially the opposition Republicans dismissed the efforts as wasteful and expensive. Ultimately they blamed the third stimulus check for the record inflation, without realizing that the rise in prices was a worldwide phenomenon and countries that had offered nothing by way of a stimulus check for their citizens also suffered deeply during the economic crisis and the inflation that followed.
But the government has realized the success of the direct payments that helped set the machinery right first while at the same time continuing with the aid at a time Americans needed it the most.
The results of the federal stimulus checks will serve as a lesson on how to help the needy fast and effectively in less strange times. repeated analysis by government and independent agencies reveals that the multiple rounds of stimulus checks significantly improved people’s ability to pay home bills and buy essential food and other groceries.
But what is of greater significance is that people were relieved of their depression and anxiety, two major offshoots of acute economic crisis. The economic crisis also leads to a spurt in crime and homelessness and the stimulus checks were largely successful in preventing it even during the peak months of the crisis.
Families With Children Were The Greatest Beneficiaries Of The Stimulus Checks
The greatest beneficiaries of the stimulus checks were families with children. Among households with children as its members, reports of food shortages fell by 42% between January and April. Financial instability fell by 43%. Among all ranges of households, incidents of depression and anxiety reported a fall of 20%.
The economic measures have helped in no small measures but the greatest benefits were from the more comprehensive of the three stimulus checks, the third stimulus check, or the economic impact payment under the American Rescue Plan Act signed by President Joe Biden immediately after he assumed power in January 2021. The Rescue Plan was signed in March 2021 and proved effective immediately in breathing fresh life into the economy.
The tried stimulus check led to an immediate decline among various lines of hardship that were concentrated among the most deprived of families. A reduction in the hardship level was a given as the scale of the direct stimulus aid was massive at $585 billion. But a dispute has raged over whether the benefits were worth the costs of the payments.
A Recurring Complain Is That The Stimulus Check Went To People Who Were Economically Unaffected By The Pandemic
A recurring criticism of the stimulus checks is that they did not address the needs of the lowest-income groups, especially the Hispanic and Black communities. Much of the money went to economically stable families. Such families did not need it and the stimulus check was part of an anomaly that left a substantial section of the low-income population, the lowest strata of the economic spectrum without any stimulus support.
There is also the allegation that the stimulus check proved to be a disincentive to workers from joining the workforce. Some conservative analysts maintain that the stimulus checks were unnecessary and that hardship would have fallen under normal circumstances as a consequence of growth in jobs and other regular safety net programs.
But the aggressive use of stimulus checks coincides with a growing interest in broad cash payments as a tool in social policy. And there is evidence that it could lead to an immediate influence on the economic pressure that is afflicting many households.
But there is strong support across parties that the Child Tax Credit stimulus checks need to come back in their expanded form given the dramatic results it achieved in 2021in alleviating child poverty.
