THE MULTIPLIER EFFECT: STIMULUS CHECKS AND CONSUMER SPENDING

THE MULTIPLIER EFFECT: STIMULUS CHECKS AND CONSUMER SPENDING

AVN Staff
April 19, 2020

STIMULUS CHECK AMOUNTS
At the writing of this report most Americans know the present perimeters of the stimulus checks provided to working America. The breakdown for the stimulus checks are usually specified as $1,200 per person; $2,400 per couple; an additional $500 per child. Although most Americans (and permanent residence) will qualify for a stimulus check some of the current qualifies under the CARES ACT are as follows: 1) a US citizen or permanent residence and filed a federal income taxes for 2018 or 2019; 2) received Social Security retirement, disability (SSDI), survivor benefits or Railroad Retirement benefits.

INCOME QUALIFIERS FOR STIMULUS CHECKS
In terms of income there are no minimum thresholds, if the essential qualifiers are satisfied. However, there are caps on the amount of income to qualify for a stimulus check under the CARES ACT. The caps are as follows: 1) Single Tax Filer $99,000; 2) Joint Tax Filer (without children) $198, 000. If the taxpayers adjusted gross income is below these initial caps, but above the minimum income requirements of 1) Single Tax Filer $75,000; 2) Head of Household $112,000 and 3) Married Filing Jointly $150,000, the stimulus check will be reduced by $5 for every $100 above the above minimum income requirements.

( see https://www.forbes.com/sites/zackfriedman/2020/04/13/stimulus-check-everything-need-know/#7ddf934d254f )

QUALIFIERS, CAPS, MINIMUMS, PHASE OUT CALCULATIONS AND LAUNCH OF IRS TRACKING WEBSITE
The qualifiers, minimums, caps and phase out calculators are reasonably well-known to an informed public. Additionally, direct deposit and check mailers are also known. (see https://www.entrepreneur.com/article/349148, https://www.cnbc.com/2020/04/10/irs-stimulus-relief-check-portal-launches-how-to-get-stimulus-check.html )

THE PURPOSE
It is important to note, that the government stimulus check program is not a “bread and circus “program designed to pacify working America (although no doubt some of the “bread and circus “ mentality was a portion of the elites motivation). The primary motivation regarding the Trump Administration’s bi-partisan support for the stimulus check program was to provide an embattled middle America with some desperately needed help to sail the stormy seas of the virus shutdown of the economy.

The stimulus money is being directly provided to working America to assist Americans to jump start their own haggard and recessive economy.

The thought is that Americans spending their stimulus check money will have a multiplier effect throughout the economy. For instance, an American taxpayer will receive their stimulus check and in turn will catch up on a mortgage payment, a car payment, office rent, or spend money on a food storage program. This middle America spending stimulus has a two-fold effect, A) the stimulus check provides needed relief to working families, especially families with children, disabilities and retired Americans.

The most vulnerable to stormy and stressful economic conditions; B) a multiplier effect, because these Americans, in turn, will spend their money in various and a sundry sector of the economy. The stimulus check program is designed to encourage short term spending and thus assist in igniting economic growth through increased consumer spending. The stimulus program is specifically designed to entrust the American working people with the task of judging wherein their money should better be spent rather than allocating the stimulus money to government bureaucrats and institutions to spend in an attempt to stimulate or jump start the economy.

The Trump Administration has provided and engineered an economic recovery policy designed to place some power back into the hands of the people, in order, to assist in stimulating consumer spending.

The road to economic recovery is a difficult one and the Trump Administration has encouraged a squabbling (and often seditious) congress into providing a needed remedy for working America to over time return to economic prosperity. The stimulus check program is a stimulus package for the American people designed to stimulate or increase consumer spending as a jump start manipulation for a recovering or recessive economy. It is an economic manipulation which places faith in the American people rather than Keynesian government bureaucrats.

By Jeffrey E, Elliott, ESQ
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