People all around the United States received three cheques from the federal government in the form of stimulus money when the COVID-19 outbreak was at its height.
However, since March of 2021, there has not been any new legislation has been introduced to put fresh money into people’s bank accounts. The attention of lawmakers has been diverted to other concerns, and there has been a dearth of general support for an additional payment.
However, there is one thing that has the potential to change that: a recession.
Why a recession can mean that there is more money available for stimulus programmes?
If the United States were to enter a recession, it is possible that politicians would respond by authorising an additional payment under the stimulus programme.
There is a straightforward explanation for why a recession would make it more probable that another payment would be made.
In the past, the federal government has responded to this kind of economic slowdown by issuing stimulus checks, which proved to be an effective tool for doing so.
In the year 2001, for instance, in response to the economic downturn that had been going on for some time at the time, the Bush government took action by distributing $300 stimulus payments to adult tax filers.
And in 2008, another recession occurred as a result of the financial crisis, and President George W. Bush signed a bill into law that provided $600 for the majority of individual taxpayers and $1,200 for married joint filers with incomes that fell below a certain threshold. These amounts were provided to help offset the effects of the recession.
A tax credit of $300 was included for each kid as part of the stimulus package in 2008.
Because there is a significant amount of historical precedent for the provision of stimulus payments during times of bad economic conditions, lawmakers are likely to feel a great deal of pressure to take action if the country once again falls on hard times.
Will there be a downturn in the economy?
It is difficult to say with any degree of accuracy whether or not a recession will occur. Some industry professionals think that one is likely to take place as a consequence of problems with supply chains, high levels of inflation, an increase in interest rates by the Federal Reserve, a prolonged conflict in Ukraine, and a variety of other causes.
However, no one can determine for definite if or when the United States will experience a recession.
Even if there is a recession in the country, there is no assurance that the government will send out stimulus cheques.
This is because there is no certainty that there will be a recession. Both the demographic make-up of Congress at the time of the economic collapse and the depth of the economic slump are important factors to consider.
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The hope that a recession will usher in another stimulus check is not the best strategy, however, because a recession can have a whole range of unfavourable repercussions, including high levels of unemployment.
Nevertheless, the greatest and most likely only possibility of further stimulus money being made available at the federal level is for there to be a slump in the economy.
