The Debate Over the Next Stimulus Check: How Much is Enough?

As negotiations continue for the next stimulus check, the debate over its size and purpose remains intense. The era of generous economic relief is coming to a halt, with policymakers now focused on addressing inflation and economic recovery. If you're wondering how much the next stimulus check should be, read on to explore key considerations.

Clawing Back Excess Spending

One of the primary concerns is clawing back excess spending that may have contributed to the economic challenges of recent years. The 1.9 trillion American Rescue Plan, signed by President Biden, poured a significant amount of funds into a recovering economy just as goods shortages were starting. This timing, economists argue, sparked rising prices and contributed to inflation.

Despite initial fears, some economists concede that the fiscal package was inflationary. The Federal Reserve, led by John Powell and the FOMC, is now focused on slowing the economy to reduce inflation. Inflation peaked at 9.1 percent in June 2022 and has since declined to 4.9 percent in April 2023 – a significant drop that suggests the new measures are working.

Ensuring Basic Needs

While the focus on reducing inflation is critical, many argue that the next stimulus check should be designed to address basic needs and prevent economic hardship. The primary goal should be to cover any increase in taxes, ensuring that individuals and families can meet their financial obligations.

Some also believe a stimulus check should provide sufficient funds to support a basic income system, where every adult citizen receives a set amount of money regularly. This approach aims to alleviate poverty and simplify social welfare programs. The idea of a basic income has been tested in countries like Finland, where the pilot study initially showed positive results.

The Philosophy Behind Basic Income

Jack Ma, the founder of Alibaba, has been a strong advocate for this concept. During a speech, he criticized banks for operating like "pawn shops," and suggested that basic income could provide a financial safety net. His perspective aligns with the idea that government programs can help individuals afford the technology and infrastructure that advanced banking systems have created.

While Jack Ma faced challenges after his comments, the concept of basic income persists. Proponents argue that it can empower individuals by providing them with a financial buffer, reducing the stress of financial uncertainty and increasing the likelihood of engaging in the workforce with a sense of security.

Consumer Sentiment and Economic Growth

The success of a stimulus check relies on consumer sentiment and its impact on economic growth. If individuals feel secure with basic income, they are more likely to spend, contributing to further economic recovery. However, if the check is too small, it might not have a meaningful impact on relief or support.

As policymakers continue to negotiate the details of the next stimulus check, they must balance the need to address inflation with the goal of supporting individual and family needs. The debate is ongoing, and the outcome will have significant implications for the U.S. economy and society at large.

Note: The decreases in inflation mentioned in the article are based on the Consumer Price Index (CPI-W) readings, which are subject to change based on various economic factors.

Keywords: stimulus check, inflation, basic income, Jack Ma