As millions of Americans found themselves without a job following the onset of the coronavirus pandemic, the federal government stepped in by issuing several income subsidies, including the $1,200 one-time payment, as well as the $600 top-up on unemployment benefits. However, now that the latter is set to expire at the end of July, many Americans will soon find themselves strapped for income sources given the slow turnaround in the job market.
As a result, The Justice Collaborative, along with the Economic Security Project organized an open letter from a group of economists, calling on policymakers in the US to extend direct cash payments to millions of Americans. According to the letter signed by 153 economists, further stimulus payments should be distributed automatically until the economy becomes more resilient.
The economists argue that such cash payments are crucial in increasing financial security, and a suitable way to increase consumer spending. As a result, the economic recovery may could surface in a shorter amount of time as opposed to reduced stimulus spending. According to an analysis conducted by Opportunity Insights at Harvard University, the federal government stimulus payments helped boost consumer spending among lower income households faster than the higher income households.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
