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Wednesday, September 28, 2022

Stimulus Checks 2022 Go Out To Residents In Various Forms: Check What Your State Has In Store For You

With three rounds of stimulus checks behind them and 169M payments later, the federal administration has been forced to reconsider further stimulus checks. A section of economists and the whole opposition have blamed the stimulus checks, especially President Biden’s Economic Impact Payment, for the worst inflation in over 4 decades.

The third stimulus check was followed by the unemployment checks which were extended and the enhanced Child Tax Credit stimulus checks, which were increased from $2,000 to $3,600 maximum, half of which had been paid in advance.

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But despite a clamor from a sector of the population for a 4th stimulus check, any further stimulus checks are certainly the last thing on the federal government’s mind.

While $3,200 was paid in total in the three rounds to each individual who fulfilled the earning criteria, critics believe it is the last stimulus check of $1,400 that was responsible for the spike in the inflation rate which has broken a 4-decade record.

The direct stimulus check to the low and moderate-income section of the population was matched by equally generous support to businesses, state, city, and local bodies, and funds for almost every section of society to ride out the storm.

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But with the economic condition taking a turn for the worse and the spread of variants such as Omicron creating fresh economic headwinds, over a quarter of Americans struggled to pay even basic household expenses and failed to ensure food on the table for their families.

Many more went back on their monetary commitments and the debts began building up just as fast as during the onset of the pandemic back at the beginning of 2020.

The unemployment rate also stands at 4.2%, way higher than the pre-pandemic level of 3.5%. That indicates there are over 2.3M fewer workers employed than before the pandemic.

Several sectors were hit the hardest during the pandemic and remained almost shut down over the period, including leisure, travel, entertainment, and the restaurant and hotel business.

Child Poverty Back As The CTC Stimulus Check Are Discontinued

The end of the enhanced child tax credit stimulus check at the end of 2021 also added to the burden faced by families with children. It dragged 3.7M more children into poverty as the result of rolling back the CTC payments after December 2021.

Child poverty was lower in 2020 than people might have anticipated. And that was due to the stimulus checks plus the unemployment benefits that most families received. 2020 had among the lowest ever child poverty recorded, a direct upshot of the series of stimulus checks and other support that year.

The US has seen higher rates of child poverty than any other prosperous country for decades. The poverty rate among children has been criminally high at 13%, thanks to skewered national policies, higher than even in many Third World countries. And going by ethnicity it went up from 23% to 27.3% among Latino children and by 2.8% to 29.2 among Black children during the pandemic.

Even before the pandemic, Democrats were pushing for an expansion of the Child Tax Credit stimulus check to include non-taxpayers and an enhancement of the annual stimulus check worth $2,000.

So President Biden introduced and incorporated it as part of the ARPA, signed immediately after coming to power in March 2021, despite strong opposition from the Republicans.

A report by the National Academy of Sciences on policy packages revealed that the extension of the CTC stimulus check would drastically reduce rates of child poverty. It was established that it had the greatest possible impact on bringing down child poverty.

So the high rate of child poverty, especially among the Blacks and the Latinos, when equated with other developed countries decreased more than anyone expected during the pandemic with the introduction of the stimulus check and later the enhanced child tax credit payments.

But the end of the monthly check led to child poverty rising above what it was before the pandemic when it was 14%. All government support at the federal level has gone. Low and moderate-income families were able to stabilize and supplement their income with these stimulus checks.

At this point, they are all going to save for some continuing expansions to food stamps. That remains the only piece of income that could be related to pandemic support from the government.

The Efficacy Of The Child Tax Credit Payments

The efficacy of the CTC stimulus check lay in that it gave money to families directly, instead of allowing it to get tangled in red tape. It was the best way to increase a family’s income directly. That was the reason it proved to be so effective. It was also extremely effective because it was able to fill several gaps that existed beforehand.

Children of extremely low-income families benefitted disproportionately from this change under the ARPA as they were earlier ineligible for full credit. So they enjoyed great gains that the middle-income families directly as a result. But in effect, all children of low and moderate-income families were receiving the CTC. Over 90% of American children were eligible for either $3,000 or $3,600 CTC stimulus check depending on their age.

The Abrupt Rise In Child Poverty From December 2021 To January 2022 Was Unfortunate

The abrupt end to the child tax credit checks was unfortunate as it had for the past 6 months provided families with a direct means to support their families, especially their children. So the gains in the past 6 months were undone by the obstinacy of the Republicans to consider extending the payments.

It led to an increase in the rate of poverty as the steady monthly checks disappeared. It created an unstable environment for low-income families with children, especially those who had lost their jobs during the pandemic.

The interesting aspect of the enhanced child tax credit stimulus checks under the ARPA consisted of direct cash-based transfers. In-kind transfers including food stamps and housing subsidies did not have the immediate effect of alleviating poverty.

Families for the first time had the flexibility of spending on what they considered was their immediate priority. Family needs vary from month to month, and they are the best judges. Under such circumstances, the child credit tax stimulus check was the right relief payment.

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