TRI-CITIES, Tenn. (WJHL) The federal stimulus package puts money directly into the pockets of American people and American businesses.
At 2 trillion dollars, the set of bills is the largest aid measure in American history.
“What it is designed to do is pump money into the economy and keep it afloat during a time of uncertainty,” says Dr. Daryl Carter, ETSU assoc. professor of History.
The legislation passed through Congress unanimously on Wednesday, giving essential relief to workers and an economy both struggling as COVID-19 cases climb.
“They really wanna be aggressive about this. The idea is it will give some degree of confidence to the consumer and the businesses that they are not gonna be left out in the lurch,” says Dr. Fred Mackara, ETSU assoc. professor of Economics.
Breaking down the numbers, the bill allocates a direct payment of $1,200 to individual taxpayers who make less than $75,000 a year. Married couples earning up to $150,000 a year can qualify for $2,400.
“There are limits on that that were put into the bill obviously to make sure that people who need it the most, get it,” says Carter.
That’s why as your annual income goes up, the payment goes down, phasing out entirely at a yearly income of $99,000 for singles and $198,000 for couples without children. The payments can change in size for families with children.
“So the idea is that, yes, we will provide, it’s not a huge amount of money, but it’s better than nothing,” says Mackara.
As far as who is eligible, about 90 percent of Americans will receive full or partial payments. This does include people who are receiving social security and disability checks. You cannot get a payment if someone claims you as a dependent, even if you are an adult, or if you owe child support.
“We’ve never had anything we can compare this to. We are sort of building this plane while we are flying it,” says Mackara.
The bill covers much more than just individual checks. It’s billions of dollars allocated for unemployment benefits, hospitals and loans for small businesses and big businesses alike.
“We don’t want to ignore big businesses because big businesses produce a lot of output and employ a lot of people,” says Mackara.
President Donald Trump thanked Congress for coming together to pass the stimulus legislation.
“What we are seeing I think is Republicans and Democrats recognizing the potential catastrophe that awaits the country if they don’t do anything,” says Carter.
The federal government and the Federal Reserve are the two fists fighting this problem, as it is something the states cannot do.
“If the federal government does not step in you would have a laundry list of problems that could drag the country down, not just into a recession but a depression,” says Carter.
There is already talk in Congress of adding another relief package to the stimulus bills.
“Is this enough? Nobody knows. The point is, without it we would be a lot worse off,” says Mackara.
Where does this $2 trillion come from? It’s a good question when looking at a country that is already in trillions of dollars of debt.
Dr. Mackara explained it saying the government is choosing the “lesser of two evils.” Pumping this money into the American economy now should prevent an economic collapse that would in turn make the national debt of $23 trillion much worse.