Stimulus Checks and Programs in the US

                 Stimulus Checks and Programs in the US

Stimulus checks are cheques issued by the US government to taxpayers to increase their spending power and stimulate the economy. Taxpayers receive stimulus payments in the mail or equivalent tax credit is added to their tax returns. During the Great Recession of 2008, stimulus checks were employed.

A stimulus check is a check issued by the US government to a taxpayer. Stimulus cheques are designed to boost the economy by giving consumers some extra spending money. This money is given to taxpayers in order to increase consumer spending and income at merchants and manufacturers, so boosting the economy.

The stimulus payments included in the CARES Act in 2020 and the American Rescue Plan in 2021 were part of a wider federal stimulus program aimed to stimulate the economy.

How to Read a Stimulus Check

Here are the security features to look for if you're expecting a check:

1. The seal of the Treasury

"Bureau of the Fiscal Service," says the seal.

2. Bleeding Ink

When moisture is introduced to the black ink of the Treasury seal, which is to the right of an image of the Statue of Liberty, security ink will run and turn red.

3. Micrographics

Microprinted words are so minuscule that they appear to the naked eye as merely a line. The words, however, become visible when magnified. Microprinting is impossible to copy with a copier, therefore counterfeit checks generally seem like a solid line or a succession of dots. On the back of this US Treasury check, the words "USAUSAUSA" appear repeatedly in tiny letters.

4. Watermark

When held up to a light, all stimulus checks are printed on watermark paper that reads "US TREASURY," which can be seen from both the front and back of the check. The watermark is small and won't be copied by a copier. Any check that does not have the watermark on it should be considered counterfeit or copied.

5. Overprinting using ultraviolet light

The Bureau of the Fiscal Service seal on the left and the United States seal – an eagle — on the right will be flanked by a protective UV pattern consisting of four lines repeating the words "FISCAL SERVICE." The payee information and the money amount field are usually where you'll find this pattern. Under a black light, the FISCAL SERVICE pattern and seals can be seen. A space will be formed in the UV area if the amount box is changed in any way. The ink used in the pattern and the seal will illuminate when exposed to black light. It is impossible to photocopy this fluorescent quality.

Stimulus Checks Examples

The 2008 financial crisis

After the financial crisis of 2008, the US economy experienced a severe recession, prompting the usage of stimulus checks. Sending out payments, according to the incoming Obama administration, would keep unemployment rates from rising above 8%.

The payments were made under President George W. Bush's administration as part of the Economic Stimulus Act of 2008. Those having at least $3,000 in qualified income from Social Security benefits, Veterans Affairs benefits, Railroad Retirement benefits, and earned income received cheques from the government. The checks were for the following amounts:

Individuals who are eligible: between $300 and $600

Between $600 to $1,200 for married taxpayers submitting joint returns.

With eligible children: an extra $300 for each child who qualifies.

Pandemic of Coronavirus

The United States government enacted a measure in March 2020 to send Americans stimulus payments to help them recover from the effects of the coronavirus outbreak. The CARES Act, among other things, stipulated tax credits of $1,200 per adult and $500 for each qualified kid. For incomes of more than $75,000 per year for individuals and $150,000 for joint filers, the refund amount decreases.

In December 2020, the second wave of $600 stimulus payments was distributed. The American Rescue Plan Act was signed in March 2021. Direct stimulus payments of $1,400 were made to those with annual incomes of $75,000 or less.

Coronavirus stimulus check

The $2.2 trillion economic relief plan passed by Congress in March 2020 included the first wave of payments. The package was the first response to COVID-19's economic impact. President Joe Biden signed the $1.9 trillion American Rescue Act into law in March 2021.

Individual taxpayers earning $75,000 per year are being phased out of the most recent batch of funding. However, after you reach the $80,000 annual gross income (AGI) threshold, you will no longer be eligible for assistance. There is a $120,000 AGI cap on how much heads of families can earn to be eligible for the support, similar to the single-taxpayer cut-off.

A single taxpayer who claims a dependant is referred to as a head of household. If your AGI is between $112,500 and $120,000, you will receive a reduced payment. Anyone with a lower income will be eligible for the entire amount. The third stimulus check will not be available to married couples who file their taxes jointly and have a combined income of $160,000 AGI or more.

How many stimulus checks have been issued?

Three rounds of stimulus checks have been given by the government thus far. In 2020, the first "economic impact payment" of up to $1,200 was distributed to low-income households. After that, the second payment of up to $600 was made at the start of 2021. Hundreds of millions of Americans have received the third round of cash assistance from the Internal Revenue Service (IRS), worth up to $1,400.

Under the third phase of government stimulus, the IRS had given more than 175 million stimulus checks totaling $400 billion as of December 2021. Some Americans, though, may still be owed $1,400 payouts.

During this year's tax season, millions of Americans may get federal stimulus money.

This comprises the following groups of people in the United States:

-         Parents who had a child in the year 2021

-         Families who filed a 2021 tax return with a dependent

-         Individuals and couples earning more than $80,000 and $160,000 in 2020 but less in 2021

-         Eligible family members who died in 2021 but did not receive the full amount of the stimulus payment

-         The IRS will distribute 162 million stimulus cheques in 2020.

-         According to the IRS, more than 147 million second-round stimulus cheques have been distributed.

Possible Future Stimulus Checks?

At this time, it appears that the fourth round of federal stimulus is improbable. Mr. Biden's Build Back Better Agenda does not yet include any stimulus payments. In May, White House press secretary Jen Psaki told reporters that the stimulus checks "weren't free" and that Biden had no plans for another round. Along with Biden, two other corporate Democrats, Joe Manchin and Kyrsten Sinema would have to be persuaded.

This is improbable because the United States is experiencing inflation as a result of high consumer demand that the supply cannot match. Stimulus cheques are intended to provide a financial boost to taxpayers during a slump. And that isn't the case right now. However, there has been increasing pressure to do so.

In fact, 50 Democratic House members signed a letter advocating for monthly direct payments, often known as universal basic income. "Another one-time round of checks would give a brief lifeline, but after that money runs out, families will struggle to pay for basic essentials once again," it said. "During this public health and economic crisis, one more check isn't enough." It was backed by Alexandria Ocasio-Cortez, a US Representative from New York, and Ilhan Omar, a US Representative from Minnesota.

Although there are presently no official bills considering a fourth round of checks, Democrats have backed a number of $2,000 as a starting point. Furthermore, a petition calling for recurring monthly $2,000 stimulus handouts just surpassed three million signatures. A fourth check may fail to pass the Senate and Congress, given the most recent bill only passed the Senate on a 50-49 party-line vote. There seems to be no hope or possibility of a fourth stimulus check.

Stimulus Checks and Programs are being criticized

Critics claim that the stimulus increased the debt by $1 trillion and merely moved economic activity that would have occurred anyhow. Unemployment rates rose even after the stimulus was introduced, according to a Mercatus analysis, proving that stimulus checks were ineffective during the 2008 recession.

According to the report, the median duration of unemployment peaked in June 2010 at 25.5 weeks, after an average of 7.2 weeks from 1967 to 2008. Others, such as American economist Paul Krugman, have argued that the stimulus package was insufficiently effective.