While the legislature has proposed an increase in payments to 2When debating $ 000, most Americans are expected to save their $ 600 checks and not spend them

Galen Gilbert knows exactly what he’s going to do with the check he receives from Washington as part of the pandemic relief package, regardless of the amount: put it in the bank

“I have more clients than I can currently handle and I’ve made more money than usual,” said Mr Gilbert, a 71-year-old attorney who lives in suburban Boston, “So I don’t really suffer financially”

Cheryl K Smith, a writer and editor who lives in Low Pass, Ore, is also in no rush to spend the money. She plans to save a serving as well while donating the rest to a local grocery bank. “I’m saving money,” Ms. said Dr Smith said

President Trump’s request that the previously approved single payment of US $ 600 be reduced to 2US $ 000 rise dominated events in Washington this week, redefining the debate for more incentives during the pandemic Mitch McConnell, the Senate majority leader, said Wednesday he would not allow a vote on a standalone bill that would end the Checks on 2nd000 US dollars and the efforts are doomed to failure, at least for the time being

Regardless of the amount, the reality is that most Americans are now much more likely to save the money they get

Of course, the money will be a lifesaver for the roughly 20 million people receiving unemployment benefits and others who work fewer hours or earn less than they used to for the majority of the estimated 160 million individuals and families who will receive it, however, spending the money is expected not to be a high priority

After an earlier round of 1With $ 200 stimulus checks being conducted, the savings rate skyrocketed and remains at nearly 40-year highs, largely reflecting the one-sided nature of the pandemic recession, which left some Americans in distress and left many others untouched

Economists on both sides of the political spectrum have said that if otherwise financially secure people get an unexpected windfall, they almost always save it. Free-market economist Milton Friedman highlighted this phenomenon decades ago

Many experts have said that a really stimulating package would have provided payments to those who need it most – the unemployed

“We know where the pockets of need are,” said Greg Daco, chief economist at Oxford Economics. “If you put it that way, the stimulus would be used much more efficiently”

And because the money is used instantly – the unemployed do not have the luxury of saving it – it would also have a much greater impact on the overall economy, what experts call the multiplier effect, essentially every dollar that goes to a needy person given, is likely to benefit the economy more, as it is used to pay for groceries or rent, for example

“The provision of 2$ 400 for a family of four in the same financial position as it was in late 2019 isn’t doing much to boost the overall economy right now, “said Mr. Said Daco, “It’s not whether it’s positive or not It’s her potency that comes into question”

Individuals with an adjusted gross income in 2019 of up to 75$ 000 receive payment of $ 600, and pairs up to $ 150Earning $ 000 a year will receive double that amount. There is also a payment of $ 600 for each child in families who meet these income requirements. Individuals who set more than these thresholds receive partial payments up to certain income thresholds

A more effective approach, experts say, would have increased unemployment insurance benefits for the unemployed by $ 600 per week, the equivalent of the stimulus package that Congress passed last spring, rather than the $ 300 weekly grant The new legislation envisions Democrats had pushed for higher payments to the unemployed and incorporated them into legislation that passed the house they control, but the move met with fierce opposition from Republicans who control the Senate and was not in the final Compromise Act included

The money could also have been used to extend two major unemployment programs much longer than the eleven weeks provided for in the new bill. The current extension only runs until mid-March, long before mass vaccinations are expected and the later spring and summer Economy normalized again

“The economy will remain limited by the pandemic for the next six to nine months,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago

Roughly 20 million Americans receive unemployment benefits and the unemployment rate is 67 percent. A year ago it was 35 percent, half a century low

And there are signs that the economy is faltering, more Americans are giving up – more than half a million people stopped looking for work and retired from work just last month, which means they haven’t count more among the unemployed

Of course, the money from Washington is welcomed by most Americans, even if they are financially secure. Others will not only save it, they will use it to pay off debts or invest

A study published in August by three economists, Olivier Coibion, Yuriy Gorodnichenko and Michael Weber, found that recipients of payments sent under the CARES law last spring amounted to 1$ 200 largely withheld spending on the money. Only 15 percent of people said they had spent it or wanted to spend it, most said they would save the money or use it to pay off debts

The Economic Aid Package will issue $ 600 payments and distribute $ 300 Federal Unemployment Benefit for at least 10 weeks. Learn more about the measure and what’s in it for you. For more information on how to get help, see our hub

Of course, some of the money that goes into the economy could soon reach those who need it most and it will also provide a financial cushion for middle class families backed by most measures but the turmoil of 2020 have not grown

In terms of the multiplier effect, however, it is likely to pale compared to the impact seen in the spring, when the unemployment rate was much higher and there were real fears that the country might experience a second world economic crisis

“The more you push the stimulus button, the less of an impact you see,” said Scott Anderson, chief economist at Bank of the West in San Francisco. And the hardest hit sectors – hospitality, entertainment, and travel – likely won’t be right now See a big boom as consumers are wary of going out or living in states such as California and New York, where dining and other dining activities are restricted

Mr Anderson said the incentive may add to some of the inequality that became apparent last year.Many employees work from home and have largely been spared layoffs – the college graduate unemployment rate is now just 42 percent

But poorly paid service workers have been hit hard and the unemployment rate is 77 percent for those with just a high school diploma. Better-off households, Mr. Anderson said he could spend the money on stocks or use it to buy a house, which “could exacerbate a bubble that is forming in some assets such as stocks and residential real estate”

Julia Bald, a librarian who doesn’t bet on the stock market in Beverly, Masswill, but plans to put her stimulus check in with the bank as a precautionary measure, if the virus rises again and the library has to close, she fears that she will Ms. Bald also has 10$ 000 in outstanding student loans, trying to save as much money as possible

“I haven’t had any major financial difficulties, it’s not that I have to worry about the rent back or anything,” said Ms. Glatze, 30 “But my nervousness about where the economy could go from here does bring me to save her just in case ”

Dennis Helmstetter of Frederick, Md., also plans to save the $ 600 payment. He kept not one but three jobs during the pandemic – as a real estate agent, clerk at Fort Detrick, and manager of the bar and restaurant at his local Elks Lodge

By not spending on travel, dining, or entertainment, he saved more money than usual: about 1 a monthPut away $ 000 While enjoying the extra boost in his savings, Mr. The 65-year-old Helmstetter believes that the Congress should have addressed the neediest people more directly

“I think you are barking at the wrong tree,” he said. “The money should go to the people who are currently unemployed”

Others who feel similar to Mr. Helmstetter takes it upon himself to pass on their payments to those who run into financial difficulties

Serena Cooper, 26, plans to donate all of her stimulus check to someone who is unemployed Ms. Cooper, a public relations assistant in Los Angeles, said she felt “blessed” to do her job during the pandemic despite it Having kept my own financial worries at 32She struggles to pay rent and other bills due to her salary

$ 000 a year

“There is no way I am rich,” she said, “But I have a feeling that my $ 600 would have a bigger impact on someone struggling with far worse struggles than I was during this pandemic”

600 stimulus

World news – USA – The stimulus money should have benefited the unemployed, say economists

Source: https://www.nytimes.com/2020/12/30/business/economy/600-dollar-stimulus-check.html