How Stimulus Will Affect You

Senate negotiators are working hard to put together a stimulus package that will bring relief to people during the crisis of the pandemic of the Coronavirus. Yet, it is not clear who will benefit from or receive the allocations of the package.We must realize that a stimulus package is a coordinated effort to increase government spending and lower taxes and interest rates in order to stimulate the economy. It is aimed at reversing a recession by boosting employment and spending.

A stimulus package can be either in the form of a monetary stimulus or a fiscal stimulus. A monetary stimulus involves cutting interest rates to stimulate the economy. When interest rates are cut, there is more incentive for people to borrow as the cost of borrowing is reduced. A potential problem of a fiscal stimulus is that to increase public spending, the government has to increase its borrowing, which could lead to higher debt.

It appears that there is almost an agreement on key points to distribute $1,000 in direct tax rebates, a $250 billion expansion of unemployment insurance, a payroll tax holiday for small businesses, and the Office of Management and Budget’s (OMB) request for $46 billion in emergency funding for coronavirus response and preparedness. They have also reached a deal on a $350 billion rescue package for small business that will feature federally guaranteed loans that will be fully refundable for employers who keep workers on payroll through the health crisis.

There is a concern of how long this money will last. Is this going to be a one-time process? How will this stimulus affect YOU?

The total cost of this package has ballooned to between $1.5 and $2 trillion dollars. Discussions are still ongoing as to finalizing the allocations.

There will groups of people who will fall through the cracks and not receive any money. What about the people who do not file taxes? What about the homeless people? What about the unemployed people who were unemployed before the pandemic. Many questions still remain, yet the decision is almost final. Remember the world is watching. So is God.

Editor's Note: As of 10:00AM, Wednesday, March 25, 2020, Congress passed a stimulus package at $2 trillion. The deal will grant $1,200 to most adults that make less than $98k or $198k per couple plus $500 extra per child, four months of unemployment coverage instead of three, $130 billion to hospitals, $150 billion to states and local governments, $350 billion to small businesses, and $500 billion to corporations.