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Wednesday, August 10, 2022

Stopping The Stimulus Checks Caused Untold Misery To Americans: Why Then Were They Discontinued?

Fresh data from the federal government reveals that after the pandemic relief programs, especially the stimulus checks, were stopped for low and moderate-income Americans, millions have been forced to wage a long battle for survival. The brief light that they saw at the end of the tunnel disappeared when the federal administration suddenly yanked away all federal support measures for the people hit hard by the pandemic.

The economic downturn caused by the pandemic has hit four out of ten Americans hard. People are struggling to put food on the table, pay their utility bills and home rentals, and buy gasoline and other essential items in the absence of additional stimulus checks.

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There has been a 50% increase since last spring in the number of people struggling to survive on their present income. But in Washington, the Republican opposition, a section of policymakers, and the corporate media have begun advocating austerity measures. They said that the common people had to face even more pain if the government was to tame inflation.

Corporates Perpetrating A Lie About The Stimulus Check Being Behind The Inflation

But data suggest that inflation has been largely driven by corporate profiteering and supply chain blockages rather than wages or consumer spending. The large corporates, especially the oil companies, have enjoyed a windfall with every increase in the price of gasoline and other essential items.

At a time people cut back on their spending, the steady rise in prices has ensured that companies were profiteering more and more from the prevailing desperate situation.

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The reality is that figures show that expanding Social Security and canceling student debt would not prove to be as catastrophic as predicted and might instead serve to boost the economy and immediately lead to positive sentiment in the market. It has been proved time and against that direct aid almost immediately improves the economic prospects of both the common people and companies.

The number of citizens who experienced financial difficulties went down starkly in the first two quarters of 2021. That was due to the unemployment benefits being added to the stimulus check benefits. The extra $300 weekly stimulus check proved to be a welcome addition to the $2,000 and more that individuals received from the federal administration.

The unemployment stimulus checks were followed immediately by the enhanced child tax credit stimulus check which benefitted families with children. For the rest of the year, families with children did not have to worry about their kids starving as they received stimulus checks between $250 and $300 a month depending on the age of the children.

The End Of The Benefits Led To An Increasing In Sufferings

The end of the federal pandemic aid was marked by a drastic increase in inflation. Consequently, since April, there has been a staggering 49% increase in Americans experiencing acute difficulty in paying normal household expenses.

There has been a substantial worsening of the situation as 13% more Americans have reported financial stress between May and June. The figure is the highest it has been even since records have been obtained in August 2020 by the Census Bureau.

The increase in the overall financial deterioration is clearly linked to the end of the pandemic stimulus checks. Most Republican states moved to cut off all federal unemployment much before they ended in September 2021. The non-cooperation by the Republicans led to the expanded unemployment programs grinding to a halt in September.

The expanded child tax credit stimulus check, which increased from $2,000 per year to between $3,000 and $3,600 per year, was allowed to die out in December 2021 despite the efforts of President Biden to at least extend the lifespan of this stimulus check by at least a couple of years.

The Republicans have tried to blame the $1,400 third stimulus check, the economic impact payment, which was part of the American Rescue Plan Act signed by President Biden in March 2021.

Record Inflation Compounds Woes Of Citizens

Even as the economy slowly crept to recovery, the record inflation rate has accelerated the suffering of Americans, and they are being forced to contend with a record increase in prices of essential items, especially gasoline, which has doubled in the past two years.

The inflation rate has consistently stayed above the 8.5% mark for two quarters in succession and crept above the 9.1% mark in July. There seems no immediate hope of abatement.

The supply chain logjam is yet to ease and the war in Europe continues to rage. To rein in inflation the federal administration has increased interest rates. The Federal Reserve’s benchmark rate will end this year at 3.4% according to the midpoint of the target range of individual members’ expectations.

Congress Inaction Continues To Be The Trend

The financial hardship of low and moderate-income households is expected to worsen thanks to an inactive Congress. Americans who hold individual health insurance plans will face a sharp spike in premiums in 2023 if the Democrats fail to extend the subsidies they passed in 2021. Without this vital extension, policyholders will receive notices of an increase in premium in October, with the midterms in November.

The end public health emergency declared by the federal administration at the start of the pandemic will formally end when the Biden administration declares it. This will lead to around 14M Americans finding themselves suddenly without Medicaid coverage even as states get the priority to evict millions of Americans off their Medicaid cover.

The conservatives have called on the federal government to decide on a final date to end the public health emergency and cut back on funding to help states start pruning their Medicaid registers.

Right-wing media house Bloomberg News stressed that the federal administration needs to end these emergency programs.

States Start Sending Residents Stimulus Checks

Even as the federal administration remains gridlocked in moving ahead further with stimulus payments, many states have moved ahead to help residents who continue to struggle. Lawmakers realize that soaring gas prices and inflation will continue to hurt citizens. And if you live in any of the dozen or more states, you could be the recipient of a mini windfall.

Maine and New Mexico are the first states to send stimulus checks to their residents while California and Hawaii could follow suit soon. The states sending out stimulus checks can do so because of the excess funds in their budget, thanks to a bumper 2021.

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