Fourth Stimulus Check Could Have Negative Economic Impact

Americans are eager for news about a potential fourth stimulus check, some will soon begin receiving Another batch of checks Experts warn that too many stimulating payments to Americans, in the form of enhanced child tax credits, can have a negative impact on the economy.

Stabilization policy and other economic recovery plans Everything that helps Americans in need During the COVID-19 pandemic, all plans are done ahead of schedule and aim to reach people as soon as possible so that many people, even with low income, can repay their debts and process their necessities. It is New York TimesThe downside of this is that economists are now saying that the results are coming. This means that if the private sector is unable to take on the financial burden from the government, it will see a subtraction of economic growth next quarter.

In addition, the wealthiest people may have one of their pandemic savings (households save an average of $ 287 billion a month from March due to less eating out and travel, and the previous year’s monthly amount. Over $ 103 billion). There may be another recession. It’s hard to know how much will be affected, as the pandemic is the first situation and everything is still very unknown.

“Financial stimulus will definitely be significantly reduced,” said Nancy Vanden Horten, lead economist at Oxford Economics. “The question is how well the economy is positioned to deal with it, and it is uncertain whether it applies much to this period we are experiencing.”

Experts at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution say the economic forecast is that things will start to turn negative. Government spending added 8.5 percentage points to economic growth in the first quarter, but the second and third quarters were slightly negative before the more significant downtrends by the fourth and 2022. It is expected to start turning in the direction of.

By the second quarter of 2022, experts predicted that fiscal policy would deduct 3.3 percentage points from growth, a record high.

Of course, there are concerns about what previous stimulus payments could do, but in addition to the potential impact of future payments, the desire for the next check Automatic payment Triggered when certain economic conditions are met. Congressmen and American citizens Similarly, we continue to demand more money, but there was already one negative impact from the influx of spending that stimulus checks brought in some cases —inflation.

Of course, experts worried about the health of the economy in the future say that while it won’t be long before Americans see the change, the situation has one benefit: reduced inflation.

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