Stimulus Checks Stimulate Spending by Lower-Income Americans, Make Little Difference Among Those Earning Over $75,000
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The economic reviews sent by the federal government in April and December 2020 had two goals. The first was to provide financial aid to people whose livelihoods had been disrupted by the pandemic. The second was to encourage people to spend money to offset the economic slowdown.
See: 59% of Americans say they will use their incentive money on this need
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The results are available. The Opportunity Insights Economic Tracker found that households with incomes below $ 46,000 increased their credit card and debit card spending by 7.9% from Jan 6-9. Households with incomes above $ 78,000 also increased spending, but by 0.2%. This is lower than the estimated expense caused by the April incentive. On that basis, researchers at Opportunity Insights estimate that sending $ 1,600 to people with incomes over $ 78,000 would cost the government $ 200 billion to generate just $ 15 billion in spending .
Congress is currently debating a new stimulus package. President Joe Biden has requested payments of $ 1,400 per person, but there are many considerations to negotiate, including the adult payment size, the child payment size, and the income limit. Based on the data in the Opportunity Insights study, it is likely that households with family incomes of about $ 75,000 will not receive a check. The first incentive sent checks to people with incomes up to $ 99,000, and the second incentive was sent to people with incomes up to $ 87,000.
See: When Do You Receive Biden's $ 1400 Stimulus Check?
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If the third round of control gets the economy going, people at all income levels will be better off. Currently, the economy favors high-income people who can work from home and have stock market investments, while many low-income people are hurt.
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This article originally appeared on GOBankingRates.com: Stimulus Checks stimulate spending by lower-income Americans and make little distinction between those who earn more than $ 75,000
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