More States Plan Stimulus Checks As Federal Government Remains Tied Down By The Republicans


Even as the federal administration remains tied up in the political intrigue in Washington, the runaway inflation has forced more states to send inflation relief to residents. Thus despite no hopes of a 4th stimulus check, people can still expect relief payments from states that rely on budget surplus and federal funds to help their residents.

With California, Florida, and Colorado coming forward with plans for their residents, the number of states sending out stimulus checks has swelled to around 20. But the excitement of more money has been tempered by the realization that the previous rounds of stimulus checks and other federal support measures might be at least partially responsible for the record inflation that continues to assail Americans for over a year.

Even as the economic impact payment, or the third stimulus check, was announced by President Biden immediately after assuming office in March 2021 through the American Rescue Plan Act, the inflation rate was making its slow but relentless march to record heights.

Did The Stimulus Check Make Inflation Worse?

In March 2021, it was a manageable 2.6%, but still almost a whole percentage more than the previous month. It crossed the 4% mark a month later ending at 4.2% in April 2021. And then it was an unceasing journey upward and by March 2022 it crossed the 8.5% mark. By June 2022 it touched a record-high of 9.1%, the highest since November 1981.

This surge has tempered the excitement of further stimulus checks. The administration is apprehensive that the well-intentioned stimulus check send by the federal administration along with the extended unemployment checks and the enhanced Child Tax Credit stimulus checks had all combined to lead to the surge in the inflation situation. And they realize that further state stimulus checks could end up making the situation even worse.

The first of the stimulus checks linked to the pandemic came in immediately after the US administration announced a total shutdown in February 2020. By April 2020 a $1,200 stimulus check was announced by the Trump administration as part of the CARES Act.

Citizens struggled to put food on the table, pay their utility and credit card bills, and pay their home rent.

The money was a great help as Americans were badly hurting and faced imminent poverty. Millions lost their source of income immediately as most businesses shut down, many permanently. The few that continued to function had to cut down working hours as demand for goods and services fell dramatically.

The federal government subsequently distributed two more rounds of stimulus checks. the second one came in December 2020. A $600 stimulus check was announced even as there was a change of leadership at the top.

Joe Biden and the Democrats took over even as Trump exited, kicking and screaming his way out of Washington as he protested that the election results had been rigged to favor Biden. His exit marked the first attempted coup in America with mobs running amok in Washinton.  

Joe Biden stayed true to his election promise of an immediate stimulus check though his $1,400 was still $100 less than what he had promised during the Georgia election. But he said that the second and the third stimulus checks combined to complete the amount that he had promised. What he did not disclose was that a section of economists had already warned of too much direct stimulus money being pumped into the economy.

Even as the money reached the hands of citizens within days of the bill being passed, the inflation rate began to inch upwards.

The $1.9 trillion American Rescue Plan Act was less than the $2.2 trillion spent under the previous rounds of stimulus checks under the Trump administration. The economic impact payment made up less than half of the American Rescue Plan Act even as the administration made provisions for businesses, education, housing, COVID-19 provisions, transportation, cybersecurity, Healthcare, and state, local, and tribal government aid.

The economic relief provisions of the ARPA were overwhelmingly geared to provide support to low and middle-income Americans. They benefited from the multiple provisions including direct payment, the expansion afforded by the bill for low-income tax credits, expanded access to health insurance, and child-care subsidies.

Citizens were also helped by the extension of expanded benefits to the unemployed, food stamps, and other rental assistance programs. The bill made few provisions to help high-wage earners, as most managed to retain their jobs during the pandemic.

Sending Money To Low And Middle-Income People Bolstered The Economy

The American Rescue Plan Act was deliberately and overwhelmingly geared to support low and middle-income individuals and families. They benefitted from the multiple benefits while the high-income earners were left out of the loop.

The economic aid to these sections of Americans was crafted with the idea that they were more likely to immediately spend the money on products including groceries, foods, and other essential items. They were also much more likely to pay off their bills, home rents to avoid being evicted, and housing costs to avoid foreclosure. This immediate run stimulated the US economy and prevented a long-term recession.

High-income earners are more likely to save the extra money. The three rounds of stimulus checks, plus the expanded child tax credit, and the earned income tax credit expansion boosted the income of the poorest fifth of the population by over $10,000. The increase in health insurance subsidies led to around 1.3 million uninsured Americans coming under the coverage of health insurance.

More State Stimulus Checks Announced Amid Rising Fears Of Further Inflation

While the worry of further inflation remains on top, California and Florida have joined the list of states giving out stimulus checks to residents. While California has dipped into its huge budget surplus of close to $100 billion, Republican-ruled Florida under 2024 presidential hopeful Ron DeSantis is relying on the Rescue Plan funds sanctioned by President Biden.

California is giving out a generous inflation relief check of up to $1,050 for joint filers earning up to $150,000 who declare at least one dependent.