Why Biden’s Stimulus Plan is Important
Since March, at the onset of the pandemic, several stimulus campaigns have been lightening the burden on Americans. Now that Biden is officially in office, a planned $1.9 trillion stimulus is set to be released after congress’s approval. While you might feel like the stimulus campaign does not directly affect you or your business, it’s important to anticipate changes that might take effect after the planned actions. Moreover, if you plan on investing in the next couple of months, it would help if you knew where the money is going.
The Country’s Rising Debt Crisis
Over the last four years, the country’s national debt has increased by a staggering 40%. The mind-boggling sums, $20 trillion to $28 trillion, to be precise, begs the question of what is an acceptable national debt amount. On average, if we decided to split the debt among American taxpayers, each individual would owe around $200,000. It’s no brainer that the pandemic didn’t help matters, but as a country, there comes a time when certain debt levels become unacceptable.
Government’s Plan to Send $1400 To Everyone
The federal government plans on sending $1400 to everyone, but the amount is subject to needs and current income. Eric believes that the government’s criteria to implement this disbursement are ineffective since some people receive the money when they don’t need it in a real sense. He believes that the limit for automatic allocation should be lowered, and the people above the automatic allocation limit would have to prove that they require help.
Enhanced Unemployment
The enhanced unemployment was improved to $300 a week through March, and now plans are underway to move it from the extra $300 a week to $400 a week and extend it through September. Although this is a good move aimed at protecting the more vulnerable in society, there are still question marks surrounding the whole idea. For example, in mid-2020, unemployment claims suddenly shrank when some of the unemployment benefits fell off. Moreover, roughly half the people who’ll benefit from this rise will earn more staying at home than they will on a full-time job. This mindset will eventually undermine the goal of getting the economy back on track since people would rather stay at home than work.
Subsidies For premium Health Insurance
After government-enforced lockdowns took effect, many people lost their jobs, some of which catered for employee’s health insurance. The allocated money is intended to boost different groups of people such as veterans, addicts, and patients experiencing mental issues. Still, some people need more medical care, and others require a small fraction, while others don’t need care at all. If the government were to effectively develop a strategy that caters to every person’s needs, it would be all good. However, the government has a dismal track record of spending money on questionable projects, which most often leads to taxpayer money loss.
Increased Support For Vaccine and Testing
The government intends to set aside $20 billion on the national vaccine program and $50 billion on testing and hiring 100,000 public health workers. We all want the fight against the pandemic to be reinforced, and hiring 100,000 health workers can be seen as a forward step in this fight. Nonetheless, there are concerns about where these new workers will end up once the pandemic has been dealt with. Will they continue working and be absorbed by state health departments, or will they end losing their jobs. As a long term measure, the idea seems viable, but the government should clarify its long-term plans towards these workers.
The $15 Minimum Wage Debate
The government plans to double the federal minimum wage to $15 an hour from $7.25 an hour. This might be welcome news for most minimum wage workers but not so much for minimum wage employers. These employers will be forced to either seek illegal labor or trim down on the number of workers. Moreover, different states boast different living standards, and $15 might be more than enough in one town, and the same amount would be a burden in another city. All in all, most financial experts believe the proposal might lead to a massive loss of jobs, and the decision is best left to individual states.
Links and Resources
Center on Budget and Policy Priorities
Moody’s Analytics
Center for American Progress Liberal/Progressive
MarketWatch.com
Forbes.com
Yale Sch of Mgmt / Pgm on Financial Stability
Committee for a Responsible Federal Budget
Tax Foundation
Euler Hermes Global
Mackinac Center for Public Policy
Wall Street Journal
