Stimulus Check

What? A check from the government...to moi? And it’s not a tax refund? What the…?

It might be a stimulus check.

Stimulus checks are checks sent with love from the U.S. Government to some taxpayers. They're almost like a reverse tax. They’re giving you money because they want you to buy things. Spend like it’s Black Friday, they say. (Amazon is a huge supporter, as you'd imagine.)

By giving consumers some extra cash, the government hopes to get those economic cogs spending again. You spend money, which goes to businesses...and that money turns into income for the workers, and some of it to profits and investments, which turns into income and investments for others, and so on and so on.

If the spending slows, the whole economic machine churns to a halt. And we don’t want that. Thus, the Keynesian answer: get people to spend. No matter the cost.

After the financial crisis of 2007-2008 that preceded the Great Recession, the U.S. Government mailed out stimulus checks to people based on their filing status. Did these checks work? Most economists think so, but it’s really hard to tell, since we can never truly compare what things would look like if stimulus checks hadn’t been mailed out. Still, more than a handful of studies found a statistically significant positive effect on the economy.

The Congressional Budget Office’s own assessment estimates that the stimulus checks and other getting-the-economy-back-on-track measures created between 1.6 and 4.6 million jobs, and increased GDP by at least a percent...maybe even three.