People all over the United States were given three checks as a form of stimulus from the federal government when the COVID-19 pandemic was at its height.
However, as of March 2021, no new laws have been enacted to deposit additional funds into people’s bank accounts. The attention of legislators has been diverted to other matters of importance, and there is no widespread support for another payment.
But there is one thing that could change that: a recession.
Why a recession might mean that more money for stimulus programs becomes available
If the United States enters a recession, lawmakers might respond by authorizing an additional payment under the stimulus program.
There is a straightforward explanation for why a recession would increase the likelihood of subsequent payment.
In the past, when the economy experienced a downturn similar to the one that is occurring now, the government responded by issuing stimulus checks, which are an effective tool for addressing the problem.
In the year 2001, for instance, the Bush administration took action in response to the recession that was still going on at the time by giving out $300 stimulus checks 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 whose incomes fell below a certain threshold.
These amounts were provided to people who filed their taxes as joint filers. A tax credit of $300 was included in the stimulus package in 2008 as well.
Because there is a significant amount of historical precedent for the provision of stimulus payments during times of difficult economic conditions, lawmakers are likely to feel a great deal of pressure to take action if the United States once again experiences challenging economic conditions.
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, an ongoing conflict in Ukraine, and a variety of other factors.
However, no one can say with absolute certainty whether or when a recession will hit the United States.
Of course, even if there is a recession in the country, there is no assurance that stimulus checks will definitely be distributed to the people.
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Both the demographic make-up of Congress at the time of the economic downturn and the depth to which the recession goes play a significant role in determining the outcome.
However, a recession can have a whole host of undesirable consequences, including high levels of unemployment, so hoping for a recession in the hopes that it will usher in another stimulus check is not the way to go about things.
Despite this, the best and most likely only chance of additional stimulus funds being made available at the federal level is for there to be a downturn in the economy.
