Two UTRGV professors say the stimulus package will help Americans but more needs to be done if the COVID-19 pandemic persists.
President Donald Trump signed the CARES (Coronavirus Aid, Relief and Economic Security) Act March 27 to provide economic relief to small businesses and families during the coronavirus outbreak.
According to the White House website (whitehouse.gov), $100 billion will go to health-care providers; $27 billion to life-saving capabilities, including the development of vaccines, and the development, purchase and distribution of supplies; and, $45 billion to the Federal Emergency Management Agency Disaster Relief Fund.
Economics Associate Professor Salvador Contreras said Congress had to pass the bill because the United States was at a standstill and economic activity had decreased dramatically.
“So, the U.S. economy has slowed down quite considerably,” Contreras said. “And so what many expect is that the number of people who are going to be unemployed is going to skyrocket.”
He said that 6.6 million people have filed for unemployment insurance as of Thursday, and in the state of Texas, the number was 156,000 people as of two weeks ago.
Contreras said this stimulus package is different from the 2007-2008 package Congress also passed to combat the Great Recession.
“In this particular case, we’re just trying [to get] the economy not to shrink,” he said. “We’re trying to limit the downside that the economy is likely to face, so it’s a little bit different.”
The legislation provides a refundable tax credit to families, giving them the immediate financial support they need.
Couples who earn up to $150,000 will receive $2,400, plus $500 for their dependents. Individuals earning up to $75,000 will receive $1,200, plus an additional $500 for their dependents.
Political science Lecturer Andrew Smith said the checks are automatically generated.
“The federal government is using previous tax returns and information to determine who is eligible because all of this is based on your annual income,” Smith said.
He said the important thing to remember is that this is not a recurring check and there has been no indication of who will receive a check or whether Congress will try to institute more of these stimulus checks.
“So, the problem is going to be the longer the coronavirus shutdown, layoffs, etc., go on, the less distance the $1,200 is going to go,” Smith said.
He said it will provide relief to those who lost their job or had their work hours cut.
“I do think some of that money could be used by companies to retain and rehire their workers once this crisis is over,” Smith said. “But, ultimately, it’s too early to tell how good a job this stimulus package is going to do.”
Smith said the overall takeaway he would argue is that this is a start. He believes it’s too little on the end of consumers and small businesses and too much on large companies who may or may not use the money.
“One, it needs to go further,” Smith said. “There need to be recurring payments for the duration of the coronavirus, shutdown, shelter in place and so forth. There also needs to be a bigger chunk of the $2.2 trillion stimulus package, as a whole, that doesn’t go to corporations. The bulk of the money, most of the money, goes to larger corporations.”
Smith said to follow the shelter-in-place order and to stay at home as much as possible.
“Even more than the money being thrown around, the more we comply, the more we try to flatten the curve, the faster this is all going to be over,” he said.
