How bad will stimulus checks and unemployments benefits affect us?

[oskar23]

There must be a downside for giving out so much money weekly and with stimulus checks. While everyone is happpy and wants more whats the bad side of it? I know people who used to make 500/600$ here in the US and now they got $800 weekly + $1200 from stimulus. What sense does it make?? Its great isnt it?

What about other countries? Do they give out money? Will it crash financial system? I hear more often about virtual currency now so they can see how much we get and what we spend on. It sounds crazy but back in a day we laughed that this virus wont affect us and it did..  will we live in different reality 2 years from now?

[Silvering]

In Cyprus they're giving some government granted help. The size of it depends on the size of the salary. If you were unemployed, nothing for you. Here we still don't have any stated help from the government, but the unemployment rate is getting higher. 7 or 8 percent currently. I was fired from my job and had to apply for a-kassa (unemployment benefits fond) and there were some rumors or discussions that the government would subsidize those so you can get 100% of your salary (otherwise you get 80 with a cap of 900 swedish crown a day). I found new job so i dont really care anymore. 

[mr moose]

What country are you in?   if they give it to everyone then the benefit is it provides the entire economy with a quick boost that you can't get through other measures (like lowering tax or removing business obstacles).  Over the population demographics some will put it straight into gambling or drugs/alcohol etc, others will make repayments and clear debt while others again will go out and buy a new tv, sleeping bag, bbq (luxury items have the biggest impact on the economy), that is why it needs too be given to a wide spread of people and not just low income earners etc.

 

 

[PlayStation 2]

I highly suspect that the US is tunneling itself into more debt for no real reason. We’ve spent a few trillion on this Coronavirus shit in three months. Where’s that money to, ya know, fix crumbling cities and roads or trying to curb opiate abuse in places like West Virginia?

[harryk]

1 hour ago, oskar23 said:

While everyone is happpy and wants more whats the bad side of it?

oof, that's a complicated topic and the answer depends on one's political and fiscal policy

 

The economy is measured by how much money is moving around. You send $10 on lunch, that money pays the cook at the restaurant, who then later buys groceries, which pays the store clerk, and so on ad infinitum. If a large number of people stop spending their money, the whole thing comes crashing down.

 

A lot of people aren't being paid right now so they have no money to spend. The immediate affect of the stimulus is to give those people, and everyone else, money to spend in order to keep the economy going. 

 

The long term affect is that the US government is borrowing money to pay for the stimulus and will eventually have to pay it back. This is known as the national debt.

 

The government borrows money by selling treasury bonds. In short, a bond is essentially an IOU with interest. You can buy US Treasury bond for some amount and in some number of years you can cash it in for more money than you paid. The vast majority of bonds are sold to banks, investors, and foreign governments. US bonds are popular because they are considered a low-risk investment due to the expected stability and longevity of the US government.

 

So the government has this massive pile of debt which it must pay off eventually. The sticking point, and where people's opinions differ, is that the due date can effectively be pushed forward forever. The government can sell more bonds today to get money to pay the bonds which it sold ten years ago and are now being cashed in. It's an endless cycle and as long as people keeping buying bonds and the government keeps paying the bonds which are due, there isn't necessarily an issue.

 

But it's an unstable equilibrium. If for any reason the cycle stops moving because the government decides to stop paying its debt or is unable to because no one will buy new bonds, that's when bad things happen. Exactly what and to what severity is up for debate.

 

(also inb4 lock)

[PurplDrank]

2 hours ago, oskar23 said:

There must be a downside for giving out so much money weekly and with stimulus checks. While everyone is happpy and wants more whats the bad side of it? I know people who used to make 500/600$ here in the US and now they got $800 weekly + $1200 from stimulus. What sense does it make?? Its great isnt it?

What about other countries? Do they give out money? Will it crash financial system? I hear more often about virtual currency now so they can see how much we get and what we spend on. It sounds crazy but back in a day we laughed that this virus wont affect us and it did..  will we live in different reality 2 years from now?

There are some downsides. Some tax paying law abiding citizens still haven't received our tax refunds. I am going on 10 weeks of waiting at the moment. 

 

Not sure the broad effect this will have but I am sure it will be up for debate in the upcoming election as it will add to our national debt. Some say that we will have to pay off our debt to mainly China eventually. But can China really afford the United States to pay all its debt back? The United States would be financially destroyed by doing so and in result would ruin millions of American lives. The best course of China is to keep lending money to the U.S. so we can keep buying its products. Our two nations are conjoined twins now, more so than some other nations. 

[oskar23]

Im from US.

 

How real is virtual currency to come to our lives? Another words no more cash. As absurd as it sounds, I hear more about it in these days.

Gold has target of $3k now. They did today reverse split to gold ETFs. If gold gets there what does it mean to currency?

[dalekphalm]

1 hour ago, PurplDrank said:

There are some downsides. Some tax paying law abiding citizens still haven't received our tax refunds. I am going on 10 weeks of waiting at the moment. 

 

Not sure the broad effect this will have but I am sure it will be up for debate in the upcoming election as it will add to our national debt. Some say that we will have to pay off our debt to mainly China eventually. But can China really afford the United States to pay all its debt back? The United States would be financially destroyed by doing so and in result would ruin millions of American lives. The best course of China is to keep lending money to the U.S. so we can keep buying its products. Our two nations are conjoined twins now, more so than some other nations. 

Just an FYI - it’s a myth that the US federal

debt is owned by the Chinese Government (or Chinese businesses/banks). 
 

The federal Debt is around $20 Trillion USD. About $1 Trillion of that is Chinese debt. $4 Trillion is from foreign countries in general (including the $1T from China). 
 

Therefore the vast vast majority of the debt (to the tune of ~$16 Trillion) is domestic debt. 
 

Source:

https://apnews.com/2f32c16ca1df4c01acc923e5d911c2ad

[TempestCatto]

It's all bullshit because college students get shafted the most. Anyone who says otherwise is a boomer. Thankfully, I'm about to transfer schools so my school debts are minimal right now, but all of my other friends are literally fucked. Not to mention, if you had a class that required labs, you can't do the labs this semester. BUT you don't get refunded for it, BUT it's still required so now you have to pay TWICE to take the same thing. If I was in the school I'm about to transfer too, I would be super fucked because I'd be taking flight lessons. All of those would be canceled and I wouldn't get a refund for those classes, plus I'd still have to pay my loans, PLUS I'd have to take those classes over again to actually get the hours in. Fun shit here the US of Ass.

 

Another thing, is here in PA, small businesses are getting absolutely ass fucked. In the spoiler below this text is a copy of a Facebook post from a small business owner here in the tyrannical state of PA.

Spoiler

I'm really sorry about the long post, but do you want to know why people are so angry in Pennsylvania? No, it’s not because their gun toting, ignorant rednecks. This is an honest, unbiased, unpolitical account of the economic disaster to small business owners from Covid-19 in the State of Pennsylvania. This is my story.

 

I own a small, family run Martial Arts School in Rural Pennsylvania, with 6 part time employees. I, along with all other “Non-essential” business, were ordered to shut down due to the pandemic. We were told there would be financial aid from the government, and it would last 2 Weeks to slow the spread and flatten the curve. The quarantine was never meant to be a long term solution or to last indefinitely. “Shut Down, Shut Up, Don’t Worry, we’ll take care of you” was the message we received. Two Weeks turned into 4 weeks, now we’re on 6 weeks, and our Governor has ordered us closed at least 2 more weeks, with absolutely no guarantee of being re-opened. My son and I have not taken a paycheck for 6 weeks, and we have had NONE OF THE FINANCIAL AID we were promised.

 

My business was eligible for 2 Federal Loans. The PPP (Payment Protection Program), and the EIDL - Small Business Disaster Loan. I applied and was apparently approved for both. The PPP is very small (13% of my average monthly income, not even enough to pay my monthly Lease), and is meant to pay employees, but how can I pay employees, when the State of PA won’t let me open. The second loan, the EIDL is meant to be a larger sum, and is meant to be used at the business owners discretion to keep the doors open. That Loan has yet to materialize, and they changed the qualifications so now I will receive only 60% of what I was initially promised. I have heard nothing about the second loan since I applied about a month ago.

 

I must remind you I am not getting political, or giving my opinion, this is my current situation. I did not make this about being a Democrat or a Republican, this is a health and economic crisis, and I am treating it as such. I reached out to our PA Elected Officials. I was respectful and professional, regardless of party affiliation. I learned about Senate Bill 613 that was sponsored by senator Mensch. This bill would give small business owners the opportunity to re-open as long as they could comply with FEDERAL CDC GUIDELINES. The bill would also bring PA businesses in line with EVERY OTHER STATE IN THE NATION, and not the “Essential, Non-Essential” guidelines laid out by PA Governor Tom Wolf. The bill passed the PA House, and Pa Senate, but was vetoed by the Governor. I don’t care about the politics of the bill, but as it turned out the bill was voted for exclusively by Republicans, and voted against exclusively Democrats. SB 613 would have laid out a plan to safely and responsibly open my business using objective and transparent criteria. This bill would have also let barbers, hairdressers, car sales, real estate agents and countless other professionals back to work safely and responsibly. Our President, Donald Trump, also laid out a 3 phase plan, which would have also allowed me to open, as long as I could COMPLY WITH CDC Guidelines. Governor Wolf has decided to ignore that as well. There is simply no logic to allowing hundreds of people into big box stores such as Walmart and Home Depot, yet not allowing small businesses to open if they follow CDC Guidelines. Basically, 50 people can touch the same dirty shelf and product at Home Depot, but I can’t buy a car or show a house if we’re both wearing a mask? How does that work? As an absolute spit in the face to small business, State run Liquor stores and the State Lottery are now open and “Essential?”

 

As of now, and as I understand it, the current plan for re-opening, will begin possibly May 8th. He did say Construction workers can go back to work, so that’s good. Wolf said he had a 6 point plan, but (I’m reading it on his website now) it gives no specifics, no metrics, no criteria, no industries, and no timeline. So, 8 weeks of no plan, no paycheck, no specifics, and none of the help I was promised. I have received at least a little financial aid from the Federal Government, and a tremendous amount of communication from our President. I have received NO HELP and very little communication from our Governor. To be very clear, he has left small businesses to fend for themselves, and seems to be actively working against us at every turn.

 

Now you have some perspective on why people are so angry and protesting. We have done everything and more of what we’ve been asked, now we need Real Leadership and a real plan to safely open PA from Governor Wolf.

 

I also am not working currently, so I applied for unemployment. However, it's going to take a few weeks to get an ID number to then continue the filing. What the fuck am I supposed to do till then? My work will take me back once this shit storm passes, but for right now - I'm running on pennies. The only people making bank right now are those that were already on unemployment. We need a serious reform to this whole system.

 

 

[Lady Fitzgerald]

2 hours ago, comander said:

1. The stimulus checks are... early tax refunds...

No, they are not. See https://money.com/stimulus-check-advance-tax-refund/

[SpaceGhostC2C]

6 hours ago, oskar23 said:

While everyone is happpy and wants more whats the bad side of it?

That it falls short.

6 hours ago, oskar23 said:

I know people who used to make 500/600$ here in the US and now they got $800 weekly + $1200 from stimulus.

$1200 is one-time, it doesn't really count when comparing income flows. It's also not stimulus: there's nothing to stimulate, economic activity isn't going down, it's being halted on purpose to avoid virus spread. Therefore, the point is not to stimulate demand and therefore higher production, the point is for everyone (i.e., as many people as possible) to afford some consumption of basic goods, whether they are working or not.

 

6 hours ago, oskar23 said:

What sense does it make?? Its great isnt it?

As much sense and as great as a symptom-relief medicine when sick. Pointless when not sick, and nowhere near solving your problem, but making it a little less bad in the meantime.

 

6 hours ago, oskar23 said:

What about other countries? Do they give out money?

Yes. Countries with more generous and/or widely extended social insurance systems are channeling through those. Still, there are several groups that would fall through the cracks (self-employed, shadow economy, etc), so additional policies are implemented or being discussed to try and patch it.

 

6 hours ago, oskar23 said:

Will it crash financial system?

No.

 

6 hours ago, oskar23 said:

 will we live in different reality 2 years from now?

Most definitely - we call that "time"  

[LogicalDrm]

Reminder to keep politics out or else this will be locked. Also, for general COVID-19 discussion, please use

***

I'm not allowed to voice my opinions on how bad the US system is vs us in Nordics countries for example. Hint: Look at your countries budget in past years and compare it to where money goes now.

[SansVarnic]

The US is not giving out Stimulus checks. Not sure why this is so hard to understand, the US is giving out compensation for sending people home and not letting them work. Legally the government has to compensate a citizen if it prevents them from going to work to earn a wage. I cannot at the moment quote or state at the moment where that is but that is were all this is coming from. Stimulus is different. Money is money, yes but these are two different things. The stimulus the government gave out 10 years ago was an option, this is a legal obligation.

 

This is not a tax return.

This is not a stimulus.

This is compensation for taking away the ability to earn wages.

The US government cannot deny a citizen the ability to earn wages without compensation.

*You are being compensated for your time lost.

 

Believe what you wish, if you wish it so. These are just the facts of what is happening.

 

*edit

[mr moose]

8 minutes ago, comander said:

I should avoid the more "ideological" subreddits. They tend to find flaws in everything, even when those flaws are imaginary.

I stand corrected. 

 

When it comes to politics, reddit is as bad as facebook.  It's just one giant clusterfuck of ignorance that exemplifies the meaning of to stupid to educate.

[mr moose]

1 minute ago, SansVarnic said:

The US is not giving out Stimulus checks. Not sure why this is so hard to understand, the US is giving out compensation for sending people home and not letting them work. Legally the government has to compensate a citizen if it prevents them from going to work to earn a wage. I cannot at the moment quote or state at the moment where that is but that is were all this is coming from. Stimulus is different. Money is money, yes but these are two different things. The stimulus the government gave out 10 years ago was an option, this is a legal obligation.

 

This is not a tax return.

This is not a stimulus.

This is compensation for taking away the ability to earn wages.

The US government cannot deny a citizen the ability to earn wages without compensation.

 

Believe what you wish, if you wish it so. These are just the facts of what is happening.

then why do they call it a stimulus all the time?   I mean if it smells like a dog, looks like a dog and tastes like a dog, why would they call it a cat?

[SansVarnic]

1 hour ago, mr moose said:

then why do they call it a stimulus all the time?   I mean if it smells like a dog, looks like a dog and tastes like a dog, why would they call it a cat?

Its a politician thing. Besides it has been correctly reported a few times, just that it has been buried fairly well. 

It sounds better (I guess) when it gets called stimulus, people tend to recognize that term. /shrug

 

*edit

I forgot to add that Tax returns will be issued and those that filed or will file, will still receive their tax return separately. 

I received my tax return in early March, I got my compensation on the 3rd day of being issued (April 15th). I was one of the lucky ones that had my compensation based on 2019 taxes instead of 2018 taxes.

 

Also I'm in a special circumstance, I resigned from my job quite literally days before the CV was discovered outside China, and because of this I cant find work, I was planning on starting my own company... that is what I call poor and good timing. I was forced to apply for assistance so I hate the fact that I am a ward of the State in order to feed my family... it sucks. Bad. But this is what i had to do, and my timing got me funds at the right time so I could by food (no tp tho). Soon as this stay-at-home order passes I will be doing all I can to get back off it.

 

So I guess @oskar23 this answers your question... its can get this low for some. But I got lucky.

[Teddy07]

Can´t speak for the US but here in Germany the government for now. There are already plans for a special tax to recover the cost despite already crazy high dues here. Not sure why people still work here lol

[jasonvp]

1 hour ago, mr moose said:

 

When it comes to politics, reddit is as bad as facebook.  It's just one giant clusterfuck of ignorance that exemplifies the meaning of to stupid to educate.

Reddit: the sweaty ass-crack of the Internet.  It can't be the asshole because [4,8]chan still exist.

[PurplDrank]

10 hours ago, dalekphalm said:

Just an FYI - it’s a myth that the US federal

debt is owned by the Chinese Government (or Chinese businesses/banks). 
 

The federal Debt is around $20 Trillion USD. About $1 Trillion of that is Chinese debt. $4 Trillion is from foreign countries in general (including the $1T from China). 
 

Therefore the vast vast majority of the debt (to the tune of ~$16 Trillion) is domestic debt. 
 

Source:

https://apnews.com/2f32c16ca1df4c01acc923e5d911c2ad

Japan and China hold most of the debt. Look at the charts. 

 

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124

[Lady Fitzgerald]

3 hours ago, SansVarnic said:

'''This is compensation for taking away the ability to earn wages.

The US government cannot deny a citizen the ability to earn wages without compensation...

If that is the case, why did I receive a payout? I haven't "earned" a wage in over a decade. I'm retired on a small pension and Social Security. The money I live on was "earned" years ago.

[Tristerin]

Inflation.  Plain and simple.  

 

A dollar holds its value, when there are fewer dollars available to have.  

[SansVarnic]

6 hours ago, Lady Fitzgerald said:

If that is the case, why did I receive a payout? I haven't "earned" a wage in over a decade. I'm retired on a small pension and Social Security. The money I live on was "earned" years ago.

Your being pedantic, the bill was passed for broad coverage [they were not worried about being overly selective just wanting to get it out quickly] read the bill, if your alive and meet the age requirement you basically get money (unless you are claimed by by a parent or guardian then no). Also though wages was the largest/main reason, if your being told to stay home and cannot enjoy your normal life style you have to be compensated for your time lost. You (the citizen) cannot have something taken away from you by the government without proper compensation. 

I know this is probably the first time in a long while the US government has taken responsibility for its actions of taking away but hey its a good start.  

 

More information specific to your question:

Spoiler

IRS link to directly answer you question via the IRS website.

https://www.irs.gov/coronavirus/economic-impact-payment-information-center 

See Eligibility > Question 2. 

Quote

Q2.  Will I receive a Payment if I do not make enough money to normally have to file an income tax return?

A2.  Yes. Eligible retirees and recipients of Social Security retirement, disability (SSDI), survivors benefits, Railroad Retirement, or veterans benefits, as well as individuals who do not make enough money to normally have to file a tax return, are also eligible for the Payment. This includes those who have no income, as well as those whose income comes entirely from federal benefit programs, such as supplemental security income (SSI) benefits. No minimum income is needed for the Payment.

 

 

The H.R.748 - CARES Act First submitted on January 24th, 2020 and passed into law March 27th, 2020. (The media will lead you to believe that this bill was introduced much later.

https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-HB37C431F57484034A3D8B58B1EC16623

 

[dalekphalm]

8 hours ago, PurplDrank said:

Japan and China hold most of the debt. Look at the charts. 

 

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124

What exactly is your point, though?

 

The vast majority of federal debt is domestic. China holds very little of it. 

10 hours ago, SansVarnic said:

The US is not giving out Stimulus checks. Not sure why this is so hard to understand, the US is giving out compensation for sending people home and not letting them work. Legally the government has to compensate a citizen if it prevents them from going to work to earn a wage. I cannot at the moment quote or state at the moment where that is but that is were all this is coming from. Stimulus is different. Money is money, yes but these are two different things. The stimulus the government gave out 10 years ago was an option, this is a legal obligation.

 

This is not a tax return.

This is not a stimulus.

This is compensation for taking away the ability to earn wages.

The US government cannot deny a citizen the ability to earn wages without compensation.

 

Believe what you wish, if you wish it so. These are just the facts of what is happening.

Source for this? You present it as a fact, but we don’t necessarily know that to be true. 

[SansVarnic]

7 minutes ago, dalekphalm said:

What exactly is your point, though?

 

The vast majority of federal debt is domestic. China holds very little of it. 

Source for this? You present it as a fact, but we don’t necessarily know that to be true. 

I just kinda did... see my reply to @Lady Fitzgerald  just now.

I still did not quote the compensatory obligation ( I still need to find that, sorry)  but I did source the Care Act that pushed this payout.

I need to consult one of my constitutional lawyer friends for specifics, but basically you should be compensated for loss of property, in this case loss of rights, time, wages... etcetera when the government is the reason you cannot access these things. You cant be denied without proper compensation. What I am referring to is old and complicated.

[dalekphalm]

1 minute ago, SansVarnic said:

I just did... see my reply to @Lady Fitzgerald  just now.

I still did not quote the compensatory obligation ( I still need to find that, sorry)  but I did source the Care Act that pushed this payout.

You didn’t provide a source that says the US government is obligated to compensate people for lost income (which you now expanded to being unable to enjoy your normal lifestyle, etc or whatever it was you said to Lady Fitz). 

 

Please provide a source for that.