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Stimulus checks and how the US government has helped Americans

The stimulus checks the US government sent out to Americans during the covid 19 pandemic were a big part of what kept them from reaching poverty in 2020.

Jennifer Bubel

The coronavirus pandemic is now in its third year, and though it’s still disrupting businesses and negatively impacting the economy, there have been significant improvements since its start in 2020, much thanks to the US government.

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When the pandemic first hit the United States in February 2020, the country experienced a severe recession. By April 2020, the unemployment rate rose to 14.7%, the highest since the Great Depression. Lower-income families suffered the most from the impact, and so the government enacted programs to help alleviate the economic hardships caused by the covid 19 pandemic and to stimulate the US economy.

As of March 2022, more than $1.5 trillion has been sent out to people across America through Economic Impact Payments (better known as stimulus checks), tax refunds, and advance Child Tax Credit payments

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The first round of stimulus checks were sent out under the CARES Act in April 2020, giving $1200 per eligible adult and $500 per child. The second round under the Consolidated Appropriations Act gave $600 per eligible adult and $600 per child in December 2020/January 2021. The third round under the American Rescue Plan came quickly after the second, in March 2021 and was the biggest of the three, giving $1400 per eligible adult and $1400 per child. At the moment, there are no talks of a fourth stimulus check, for several reasons.

But the impact of the three stimulus checks that were released in the last two years have made a significant difference in helping limit poverty and to stimulate the economy. The majority of households who lost employment-based income did receive a stimulus check. The checks played a vital role in preventing several Americans from reaching poverty in 2020.

“(Without stimulus checks,) the economy might have tipped into outright deflation and slower economic growth, the consequences of which would have been harder to manage.”

San Francisco Fed, economists

Each round of payment led to a significant rise in personal income and consumer spending in that month. The checks given under the Consolidated Appropriations Act were given mainly in January 2021. In that month, there was a 3% monthly increase in real consumer spending and a 10% increase in real personal income. The personal savings rate increased from 13.5% in December 2020 to 20% in January 2021.

They also contributed to stronger economic growth, boosting the US’ economic output by 0.6%, according to the Congressional Budget Office. The poverty rate in the US fell to 9.1% in 2020, the lowest it’s been since estimates were first released in 2009.

A recent study showed that the economic relief programs kept 6 million children out of poverty, 3 million of which were primarily due to the Child Tax Credit.

If the US government decides to make future policies to improve upon these programs, they should look to this data as it’s shown that the Economic Impact Payments did a great deal to stimulate the US economy and help the American citizens to stay afloat during a pandemic that unexpectedly took jobs, healthcare, and security from several Americans.


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