What would the economic impact be if a fourth round of coronavirus stimulus checks were sent out to Americans? When Congress approved $1.9 trillion in stimulus payments to most Americans making less than $75,000 as part of the American Rescue Plan, it was billed as an effort to bolster the struggling economy ahead of its recovery coming out of the pandemic.
However, with the rise of the Delta Variant, new questions have been circulating about the possibility of a fourth stimulus check. One of the questions associated with it is sheer cost.
How much would it cost taxpayers to send out another round of stimulus checks? Whether those are worth $1,200, $1,400, or $2,000 – the fact is that there would be short-term and long-term implications.
To understand how much another round of stimulus checks would cost, though, looking at the cost associated with past measures is necessary.
As part of the American Rescue Plan, Congress authorized spending $1.9 trillion, which included $1,400 in direct payments billed as coronavirus relief. The plan also extended unemployment benefits, which added even more cost to the plan and final spend, which was supported by Democrats and Republicans.
All told, the national debt is climbing toward $25 trillion.
The cost of the CARES Act, which was the first coronavirus relief package had a per taxpayer cost of approximately $16,800. Payments to Americans were $200 less in that round, but the income qualifications did not change significantly in the 2021 version of relief. Simple math shows that the three existing relief packages carried a total, per taxpayer implication of approximately $35,000 to $40,000.
But that might not be all if a fourth round of stimulus checks are approved by Congress. However, there is growing concern that with the rise of COVID’s Delta Variant, even more aid could be needed, especially if economic recovery is sluggish heading into the winter months.
While the previous stimulus checks caused increased economic activity in some sectors, economists have worried that it also caused some of the inflation that has been reported recently. While the Federal Reserve said late last week that it was not concerned with the aid to Americans, or its role in creating additional inflation – the rate of inflation began to slow in late-summer. If that trend continues, some economists worry that another round of stimulus payments could rocket it back upward – just as consumer prices are coming back into line.
Most policy and Congressional watchers agree – there will not be another stimulus bill until 2022 – if there is one at all. But that certainly won’t stop the evaluation of the real, long-term costs to taxpayers of all stimulus bills.