The Corona pandemic is now in its third year, and although it is still disrupting businesses and negatively affecting the economy, there have been significant improvements since its inception in 2020, much thanks to the US government.
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When the pandemic first hit the United States in February 2020, the country experienced a severe recession. In April 2020, unemployment rose to 14.7%, the highest since the Great Depression. Lower-income families suffered most from the impact, and so the government adopted programs to help alleviate the economic hardship caused by the covid 19 pandemic and to stimulate the U.S. economy.
As of March 2022, more than $ 1.5 trillion has been sent out to people across America through economic impact payments (better known as stimulus checks), tax refunds, and prepayments for child tax deductions.
The first round of stimulus checks was sent out under the CARES Act in April 2020, giving $ 1200 per. eligible adult and $ 500 per. child. The second round of the Consolidated Appropriations Act yielded $ 600 per round. eligible adult and $ 600 per. children in December 2020 / January 2021. The third round of the US rescue plan came soon after the second, in March 2021 and was the largest of the three, giving $ 1400 per. eligible adult and $ 1400 per. child. Currently there is no one is talking about a fourth stimulus checkfor several reasons.
But the impact of the three stimulus checks released in the last two years has made a significant difference in terms of reducing poverty and stimulating the economy. The majority of households that lost employment-based income received a stimulus check. Controls played a crucial role in preventing more Americans from reaching poverty by 2020.
Each round of payments led to a significant increase in personal income and consumer spending in that month. The control under the Consolidated Appropriations Act was mainly granted in January 2021. In that month, there was a monthly increase of 3% in real consumption and a 10% increase in real personal income. Personal savings increased from 13.5% in December 2020 to 20% in January 2021.
They also contributed to stronger economic growth and increased US economic output by 0.6%, according to the Congressional Budget Office. The poverty rate in the United States fell to 9.1% in 2020, the lowest it has been since the estimates were first published in 2009.
A recent study showed that financial aid programs kept 6 million children out of poverty, 3 million, of which was primarily due to the child tax deduction.
If the US government decides to make future policies to improve these programs, they should look at these data, as it is shown that The Economic Impact Payments did a great deal to stimulate the US economy and help US citizens stay afloat during a pandemic who unexpectedly took jobs, health care, and safety from several Americans.