Could We Get Another Stimulus Check?: Who doesn’t like free money with no strings attached? I’m talking about federal government stimulus checks.
It’s a new year and President Joe Biden and Democrat lawmakers have been stymied lately on their ambitious agenda that has resulted in the paralysis of the Build Back Better Act and voting reforms. They are eager for some kind of policy deliverable since this is a midterm election year. This desperate political environment has some people wondering if there would be a possibility of getting a stimulus check this year. Let’s break down what the possibilities look like.
Stimulus Check Demands Mean Many Americans Are Still Struggling
While the unemployment rate has dipped to 3.9 percent in the last Department of Labor reporting period, there are still 6.3 million unemployed people. Inflation has gone up as prices from everything from food to gasoline to rent and used cars have spiked upward. The annual inflation rate blasted to 7 percent in December of 2021 – the highest since June of 1982. No doubt a stimulus check could help mitigate to a certain extent some of these challenges.
Covid Won’t Go Away
Another factor is the Omicron variant of Covid-19. Its worrying level of infection has some industries smarting. Cruise ships are canceling their trips. Restaurants are closing dining rooms. Gyms are curtailing use. These businesses may need and could request federal help in the form of some type of monetary injection from the federal government.
Universal Basic Income Becoming More Popular
This has millions of people signing petitions to make their desires heard for more government stimulus. Some people are pointing toward policies of universal basic income – a guaranteed government monthly payment to all citizens. Proponents include former presidential and New York City mayoral candidate Andrew Yang who is a universal basic income fan. Several big-city mayors have joined a coalition called Mayors for a Guaranteed Income. Even Martin Luther King Jr. may have appreciated the policy after calling out racial wealth equality and articulating the need for social justice. Some observers have pointed out that King would have favored the monthly payments for all citizens.
Government Stimulus Is the Gift That Keeps On Giving
In theory – particularly theory from the Keynesian school of political economy – government stimulus is designed to goose the economy. Government spending ideally primes the pump and gets more people to splurge on consumer items, which is an estimated 70 percent of the U.S. economy. Consumer spending can sometimes be as much as $14.5 trillion per year, as it was in 2020.
But this depends greatly on what people would do with another stimulus check. Will they spend it in a discretionary manner for non-essential goods and services? Think big screen televisions or movie tickets. Or will they spend it on necessities such as food and shelter? Will they make bill payments or catch up on credit card balances? Will they invest in stocks and bonds? It’s not clear where a new stimulus check would go and how beneficial it would be to the economy. Many times, people just end up saving it.
New Spending Could Create More Inflation
Not every consumer expenditure helps the economy as a whole by creating jobs and boosting economic development. And what about inflation? Stimulus checks would increase the money supply. Too much money chasing too few goods leads to additional price hikes. The federal government would have to borrow more with the Federal Reserve Bank buying bonds from financial institutions – essentially printing money through quantitative easing. Then the dollar can be devalued under these conditions that hurt purchasing power.
How About Going Back to Work Instead?
Conservatives point out that giving away “free money” reduces the propensity of people going back to work. The Bureau of Labor Statistics estimates that there were 10.6 million job openings at the end of November last year. The importance of the dignity of work, this thinking goes, outweighs getting a monthly handout.
The Republicans in the Senate (along with two Democrat senators) have put a hold on new legislation. It is not likely that the GOP Members of Congress would vote to enact another stimulus check for individuals or monetary relief for certain businesses. Budget hawks such as U.S. Senator Rand Paul (R-KY) would likely threaten to filibuster new stimulus spending. These fiscal conservatives maintain that “free things are not free.”
Now serving as 1945’s Defense and National Security Editor, Brent M. Eastwood, PhD, is the author of Humans, Machines, and Data: Future Trends in Warfare. He is an Emerging Threats expert and former U.S. Army Infantry officer. You can follow him on Twitter @BMEastwood.