Stimulus package: why $1200 to everyone?
Video 02 | Stimulus Package: Why $1200 to everyone?
You might have heard about the federal government stepping in to help during the Coronavirus pandemic.
This help is what they call a stimulus - actions taken to stimulate the economy, so that it doesn’t collapse
One Key component of the stimulus is direct payments to people for $1200
Why would the government do this?
Since these shut downs all across the country have started, nearly 10 million Americans have filed “jobless claims” with the government. This dwarfs all other jobless claims over a two week period by 10x.
The main goal in this case is to ensure that people can pay basic bills like rent or mortgage, utilities, and so on
If people can’t pay their rent, that hurts the landlords, they have a mortgage to pay
If landlords can’t pay their mortgages to the bank, the bank is hurt
If banks are hurting badly enough, that turns around and hurts regular people because the bank can’t extend new loans
If regular people can’t get new loans, they might not be able to pay for other basic needs or make important purchases. Small businesses may have to close without these loans from banks.
Those small businesses might have to close down without the help from the bank.
Then more people could lose their jobs.
And it is a dangerous cycle…
The government wants to stop this from happening because people are out of work through no fault of their own. It is the government's responsibility to intervene to protect the people.
Unlike the money sent out during the 2008-2009 recession, this money is not money that will be spent on shopping or eating out or on vacations
There is no where to go! Everything is closed.
This money has jobs it is going to do but each individual recipient gets to choose what they do with that money.
Choices:
Make sure all bills and expenses are paid
Save in an Emergency Fund in the bank
Pay down debt like credit cards or personal loans
Invest in stock market for retirement
Buy from local businesses
Donate to charity
Buy other items
My mom is going to donate to political candidates that she is passionate about
Some people will save it if they have a job now but are uncertain about their employment future