If you live in one of these states, you might be eligible for additional money from the stimulus package. On the other hand, it is quite unlikely that the federal government will authorise yet another batch of stimulus cheques shortly.
The payments that the state issues are often less than the ones that Congress allocated for the years 2020 and 2021.
Those who are having trouble paying the high cost of food, gas, and utilities may appreciate any assistance they may get.
However, there is a concern among some economic experts that stimulus payments may boost consumer demand even further, which will ultimately lead to an increase in inflation.
What Kind of Results Did You Get from the Covid Stimulus Checks?
The consumers who were affected by the shutdowns of Covid found that the stimulus checks, which were intended to serve as an advance on their tax credits, were successful in helping them cover necessary expenses.
According to the respondents who got a payment from the Bureau of Labor Statistics, their primary uses for the money included purchasing food (66 per cent), paying rent (28 per cent), and making payments on their mortgages (23 per cent).
The fact that an earned income was not required to qualify was one of the factors that helped make the relief effective.
Another factor was that the tax credits were refundable, which meant that they did not just reduce your tax bill but could also be refunded to you. Both of these factors helped make the relief effective.
According to James R. McTigue, Jr., who serves as the director of tax policy and administration at the United States Government Accountability Office, “[The] Treasury and the IRS got a lot of money out the door to eligible individuals very rapidly” (GAO).
The Government Accountability Office (GAO) publishes reports at regular intervals on the federal response to COVID-19.
However, there were some difficulties in dispersing the funds. People who were not required to file their taxes and therefore did not automatically receive the CARES Act stimulus payment were among the least likely to receive a check.
This group included 12 million people who were among those who were already struggling the most financially.
According to McTeague, “We found that underserved communities such as nonfilers, first-time filers, unbanked/underbanked, mixed immigrant status families, those with limited internet access, and those experiencing homelessness were likely to experience difficulties with receiving timely payments.”
“We found that underserved communities such as nonfilers, first-time filers, unbanked/underbanked, mixed immigrant status families, and those with limited internet access were likely
Past Stimulus Checks
It wasn’t the first time that a national disaster forced the federal government to send out large-scale relief to individuals; in fact, it was the Covid epidemic that did it. In the past, there were also direct payments made for these relief efforts:
The New Deal of 1933 provided direct payments to individuals as well as to farmers as a means of compensating for lower levels of production.
The Economic Stimulus Act of 2008 provided tax rebates of up to $600 per taxpayer, in addition to an extra payment of $300 per child.
Reasons Why the Federal Government Will Not Issue Another Round of Stimulus Checks shortly
There is scant support among politicians for another round of COVID stimulus checks to fight inflation, even though these checks helped keep many households afloat during the worst stages of the pandemic.
Some financial experts believe that increasing the amount of cash available to consumers will make the primary cause of inflation, which is strong demand combined with insufficient supply, even worse.
There does not appear to be a problem with the generation of demand at this time. According to Josh Bivens, research director at the Economic Policy Institute, “people (including firms and governments) are spending robustly, therefore we do not need to pump up aggregate demand.”
According to Jason Furman, an economics professor at Harvard and a former chair of President Obama’s Council of Economic Advisers, “Stimulus checks would raise demand.”
[Citation needed] “However, supply is quite constricted at the present, which means that any more demand would only result in price increases.”
According to Furman, the fact that previous stimulus cheques were coupled with interest rate reduction by the Federal Reserve made them more effective in fighting the economic crisis.
According to Furman, “If the government gave out stimulus cheques now, however, it would be fighting the Fed which is raising interest rates to limit inflation.” The end result of this conflict would be heightened economic volatility and uncertainty.
Bivens thinks that a more effective strategy would be to concentrate on eliminating lags in the supply chain.
According to him, further policies that could help include more taxes on the wealthy and companies, but he believes that the focus of efforts to alleviate inflation should be narrowed to households with low to moderate incomes.
What kind of anti-inflation measures is being taken by the Federal Government?
There have been a few different proposals made by Vice President Biden to combat inflation, but the majority of them have been met with resistance in Congress.
In the meanwhile, the federal government is taking several measures to curb inflation, including the following:
Increasing the Availability of Oil
Through November, the United States Strategic Oil Reserve will continue to make available an additional one million barrels of oil each day. According to Furman, this action most likely had a minimal effect on the level of inflation.
E15 gasoline, which results in higher emissions but has lower costs, will be allowed to be sold throughout the summer thanks to an additional effort made by the Environmental Protection Agency (EPA), which issued an emergency waiver to allow its sale.
Improving Supply Chains To strengthen supply chain infrastructure and bring down prices for consumers, lawmakers have taken several steps, including lowering tariffs, adopting the Bipartisan Infrastructure Law, and establishing the Supply Chains Disruptions Task Force.
Bringing Down the Demand
According to Furman, “the primary lever the government has to bring inflation down is to reduce demand in the economy.” [citation needed]
“The Federal Reserve is presently doing that by increasing interest rates, and Congress might help by lowering expenditure on government programmes or boosting taxes. According to him, this is the only method that the government has ever used to successfully bring inflation under control.
The United States Federal Reserve raised the benchmark interest rate for the fourth time in 2022 on July 27. There may be several more price hikes before the year is over.
How Are States Dealing with the Problem of Rising Inflation?
It’s possible that direct payments won’t help the inflation rate, but a growing number of state governments are responding to price increases by providing residents with direct payments.
The following is the maximum amount that can be paid out to persons in states that have given their approval for payments:
California: $350, extra $350 for qualifying dependents
Colorado: $500
The amount of $300
$450 per child, for certain households, in the state of Florida
Georgia: $250
Hawaii: $300
Idaho: $75
Illinois: $50
Indiana: $125
Maine: $850
$750 was awarded to front-line workers in the state of Minnesota
State of New Jersey: $500
Two rebates totalling $750 are available in New Mexico.
Oregon: $600
800 dollars: South Carolina (SC)
Virginia: $250
Kansas, Kentucky, Massachusetts, North Carolina, and Pennsylvania are among the five other states that now have legislation for tax rebates or stimulus payments pending in their respective legislatures.
Additionally, several states have passed legislation to create gas tax holidays, which are periods in which the state’s tax on fuel is temporarily waived.
Gas prices could drop by an additional 18 cents per gallon if the federal government instituted a gas tax holiday, as proposed by Vice President Joe Biden. However, it is unlikely that this proposal will be approved by Congress.
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In addition, the Gas Rebate Act of 2022, which includes a proposal for energy rebates of $100 per month per eligible taxpayer, appears to lack the support it would need to be approved. This support is necessary for the bill to be passed.
