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Thursday, December 1, 2022

Despite Conservative Concerns Over A Spike In Inflation, More States Move In To Give Stimulus Check To Residents To Troubling

Despite the success of the stimulus check, it has its fair share of detractors. When America was forced to declare a prolonged shutdown, it was already too late to prevent a pandemic. and the initial obduracy of Trump in refusing to recognize the gravity of the situation ultimately led close to 100 million cases and 1.1 million deaths.

But the prolonged shutdown also brought more issues than the medical catastrophe. With the American economy shut down for the first time, there was the fear of a severe recession that was expected to last for at least a year.

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But the successive stimulus check changed the situation and the final results were not as severe as had been initially predicted. The first two stimulus checks and the other support measures for businesses and the reorganizations halted the economic downslide, even as millions of workers remained trapped in their homes.

The immediate aftermath of the shutdown was the worst as millions lost their source of income. With the total economic shutdown, there was no prospect of any other means of earning for such people. With most low and moderate-income citizens living paycheck-to-paycheck, the first stimulus check saved people from imminent starvation, homelessness, and debts.

The money also saved the economy from sinking into a deep recession, like the one faced by the US in 2009. The first two stimulus checks helped Americans survive. It helped ensure food on the table, regular payment of debts and mortgages, and kept people from venturing out of their homes except for the most urgent of needs.

Stimulus Check
Stimulus Check
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This move helped the virus from spreading more rapidly and prevented a catastrophe that could have led to the collapse of the economy. The economy held on somehow. The second stimulus check became a necessity as variants of the COVID-19 virus appeared, including the virulent Omicron variant. This severely delayed the process of recovery and prolonged the economic downturn.

The change at Washington also brought changes on the ground. The American Rescue Plan Act was signed by incoming Democratic President Joe Biden immediately after he assumed office after a prolonged battle to claim his place as Trump staged what virtually amounted to a coup by inciting riots in the capital and cajoling the vice-president, Republican states, and federal officials, to overturn the election results.

By the second week of March 2021, President Biden had signed the ARPA and within a week, the third stimulus checks, or the economic impact payment, began to hit accounts across the US.

The Rescue Plan Provided A More Wide-ranging Support Than The Stimulus Checks

But the ARPA was not limited to the stimulus checks alone. The Rescue Plan was an enormous and comprehensive package that made provisions for every segment of the US economy. Through this wide-ranging support, the federal administration ensured that the US economy stayed firm in the face of the worst crisis the nation faced since World War II.

The Rescue Plan also advanced emergency assistance and programs for small businesses, organizations, and local, tribal, and state administrations. These small business grants and aid helped small businesses survive the prolonged crisis, kept workers on the payroll despite a total shutdown of operation in some cases, and ensured that the American economy did not sink into a prolonged recession like the one faced by the country in 2009 after the economic collapse.

Just as the $787 billion economic stimulus package saved the US under Barack Obama from a deep depression in February 2009, the timely intervention by the Biden administration helped stave off an even bigger economic crisis that would have lasted for months.

Within a month of the injection of another $1.9 trillion, the economy had turned around and even witnessed a mini-boom period in the last two quarters of 2021. But the creeping inflation has undone much of the good. The beginning of 2022 proved to be particularly troublesome for low-income households, as all forms of stimulus checks finally ended with the last of the enhanced Child Tax Credit stimulus check in December 2021.

States Move In With Help From Federal Funds Given Under Rescue Plan

The Rescue Plan allocated around $350 billion to state, tribal, and local governments under the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). These funds were given to support the health and economic recovery in their respective territories and areas from the COVID-19 public health emergency.

Stimulus Check
Stimulus Check

The funds were given for fighting the COVID-19 pandemic and also support affected households and businesses that continue to suffer from the prolonged pandemic. The funds were also to be used to maintain crucial public services even amidst declining revenues caused by the pandemic.

Finally, the fund was to be utilized to build a strong, equitable, and resilient recovery through investments that were supportive of a prolonged opportunity and growth.

Utilizing The Federal Funds For State Residents And Businesses

The SLFRF funds were to be utilized for replacing lost public sector revenue. The funds were to be used to provide government services that were equal to the amount of revenue lost as a result of the pandemic. The funds were also to be used to provide public health services and respond to the negative impact of the pandemic.

This was achieved through support for the health of the affected communities, and simultaneous support to industries, small businesses, the public sector, and nonprofits to help them recover from the economic impact of the pandemic.

Essential workers continued to provide support during the pandemic. Their support was crucial, as it kept the emergency sectors running. Such essential workers were not limited to the medical sector and included among others electricity, law enforcement, fire department, and essential services providers such as gas and water. The funds with the states have now come in hand for giving out state inflation relief stimulus checks.

With prices touching record highs and the inflation rate showing no signs of abatement, the state stimulus checks will prove to be the support measure that will make up partially at least for the negative increase in earnings that most households have experienced in 2022. The latest among states to reach out to residents are California and Republican-ruled Florida.

Another state that could be inching towards a stimulus check is Ohio, with the Democratic gubernatorial candidate promising a stimulus check if elected to power in the upcoming gubernatorial elections.

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