The coronavirus pandemic is now in its third year. While it is still affecting businesses and badly impacting the economy, tremendous progress has been made since the outbreak began in 2020, mainly owing to the US government.
The United States was in a severe recession when the epidemic first struck in February 2020. The unemployment rate has risen to 14.7 percent by April 2020, the highest since the Great Depression. Lower-income households bore the brunt of the effects. The government responded by enacting programs to help ease the economic burdens of the covid 19 pandemic and revitalize the US economy.
Through Economic Impact Payments (also known as stimulus cheques), tax refunds, and advance Child Tax Credit payments, more than $1.5 trillion has been distributed to households across America as of March 2022.
In April 2020, the first round of stimulus cheques was mailed out under the CARES Act, with each qualified adult receiving $1200 and children receiving $500. In December 2020/January 2021, the second phase of the Consolidated Appropriations Act provided $600 per eligible adult and $600 per eligible child.
The third wave of the American Rescue Plan, which began in March 2021 and ended in March 2022, was the largest of the three, awarding $1400 to each qualified adult and $1400 to each eligible child. For a variety of reasons, there are currently no plans for a fourth stimulus check.
Most households who lost income due to unemployment received a stimulus check. The checks were critical in keeping numerous Americans from falling into poverty in 2020. However, the three stimulus checks issued in the last two years have considerably reduced poverty and stimulated the economy.
The Consolidated Appropriations Act checks were primarily distributed in January 2021. Each payment cycle resulted in a significant increase in personal income and consumer expenditure. There was a 3% monthly increase in actual consumer expenditure and a 10% increase in real personal income. In January 2021, the individual savings rate raised from 13.5 percent in December 2020 to 20 percent.
According to the Congressional Budget Office, they also led to faster economic growth, increasing US output by 0.6 percent. The poverty rate in the United States fell to 9.1% in 2020, the lowest level since estimates began in 2009.
According to recent research, economic relief programs kept 6 million children out of poverty, with the Child Tax Credit accounting for 3 million.
Suppose the US government decides to make future policies to improve these programs. In that case, they should look to this data, as it shows that the Economic Impact Payments did a lot to stimulate the US economy and help American citizens stay afloat during a pandemic that unexpectedly took jobs, healthcare, and security away from many people.