How Big is 1.9 Trillion? The Stimulus and What does it mean for You?

stimulus money

How big is a trillion? If I had serious insomnia and wanted to count sheep could I count to a trillion before I nodded off? If I collected pennies could I collect a trillion pennies before I would need to rent a moving truck to haul them over to the bank to deposit my 1 billion dollars worth of 1 trillion pennies? No to both those questions. https://math.answers.com/Q/How_many_pennies_are_in_a_trillion_dollars

So how do governments get to play with such big numbers? Because they can. And this past week Joe Bidens’s 1.9 trillion dollar economic  stimulus plan will have “far reaching effects” on the country as we struggle to come up for air and back to some semblance of normalcy after this devastating pandemic year that has taken the lives of over a half million souls in the United States. 

For those of you who have had your heads in a hole and seriously never listen to the news I will catch you up as to what the stimulus is. 

“Billed as the American Rescue Plan, the package augments many of the measures in Congress’ historic $3 trillion coronavirus relief bill from March and in the $900 billion legislation from December, which was scaled back to garner support from Senate Republicans.”

“The mammoth bill approved by the Senate on Saturday would provide direct payments to Americans, extend jobless benefits and provide a huge financial infusion to states and local governments as well as to schools to help them reopen. It provides funding for priorities like coronavirus testing and vaccine distribution. And it amounts to an ambitious antipoverty program, offering significant benefits for low-income people.”

“The proposal includes $1,400 stimulus checks, expanded tax breaks (like the child tax credit), $400 enhanced unemployment benefits, extended jobless benefits for the long-term unemployed and a food-stamp expansion.” https://www.cnbc.com/2021/01/23/how-bidens-covid-relief-plan-may-reduce-child-poverty.html

“Through 2025, it would exempt student loan forgiveness from income taxes”

Within weeks most Americans will begin to see stimulus checks in the mail or as direct deposits in their bank accounts. For some the money will be a lifeline, for others the money will help to pay off past due bills, for others the money might be a great way to invest in the stock market, and then for others like me the money will be used to pay for an unexpected nuisance expense: in my case a sudden expensive car repair. I guess I can be zen about it and assume the attitude that if not for the stimulus I would be more so in the hole. 

The highlight of the plan is the $1400  – that I know most of which will be going to repair my car. Although not everyone gets $1400. “The plan calls for sending another $1,400 per person to eligible recipients.” This is in addition to the $600 that was approved by Congress in December. 

“Individuals making under $75,000 and married couples making under $150,000 would receive direct payments of $1,400 per person. The bill would also provide $1,400 per dependent.”

“The payments would gradually decrease above those income levels and disappear entirely above an income cap: $80,000 for individuals and $160,000 for married couples.”

When it comes to the stimulus it pays to be poor. Not really. And 80k is not that poor but in the coastal cities that income  gets chipped away with basic expenses pretty quickly. Although the concept of what is enough or ‘just enough’ is relative. I would love to know what it feels like to earn a mere half of 80k which brings me to one very pivotal and historic part of this stimulus plan: The child tax credit.

Biden’s stimulus bill contains a child tax credit for parents to receive up to $3,600 per child.” “Democrats aim to distribute this credit through monthly checks. Parents with children ages 5 and under could get a $300 payment per child, while those with kids between 6 and 16 could get $250 each month.”

The details of this life raft for families are as follows: https://www.nytimes.com/2021/03/07/us/politics/child-tax-credit-stimulus.html

“The bill, which is likely to pass the House and be signed by Mr. Biden this week, raises the maximum benefit most families will receive by up to 80 percent per child and extends it to millions of families whose earnings are too low to fully qualify under existing law. Currently, a quarter of children get a partial benefit, and the poorest 10 percent get nothing.”

“While the current program distributes the money annually, as a tax reduction to families with income tax liability or a check to those too poor to owe income taxes, the new program would send both groups monthly checks to provide a more stable cash flow.”

Why is this so important? Because more than 10 million children live below the federal poverty line as of 2019 and with the pandemic, job losses, and school closures many children have gone hungry. Single mothers are especially hard hit. Poverty affects every aspect of a child’s psyche and colors the child’s world which negatively impacts how the child will move into adulthood. 

“There is fascinating research out there that shows children in poverty, their brains are actually not developing at the same pace or in the same ways as children in well-resourced households, so that children become disadvantaged for life,” says Elaine Maag, who studies tax policy at the Urban Institute.”

The United States is a third world country in its response to child poverty. The United States is a third world country in its response to poverty in general. https://confrontingpoverty.org/poverty-discussion-guide/why-is-poverty-higher-in-the-u-s-than-in-other-countries/

“Right now, less than 3% of families [in the U.S.] receive any kind of cash assistance,” says C. Nicole Mason, who heads the Institute for Women’s Policy Research. “The social safety net has all but eroded and dissipated over the last two decades or so.”

“Compared with other wealthy nations, the United States does little to reduce child poverty. According to the Organisation for Economic Co-operation and Development, the U.S. ranks 37th among OECD nations — barely ahead of last-place Turkey — for how little it spends on family benefits: just 0.6% of gross domestic product in 2019.”

Investing in children has long term benefits for the child and society. A government that cannot see that is not only short sighted but inhumane and those lawmakers have no business in the business of governance. 

“Research suggests that investing money to lift kids out of poverty, especially young children, has enormous long-term benefits.”

 “They’re not only better today, but it turns out they do better in school, they’re more likely to graduate high school, more likely to attend college, less likely to be recipients of public assistance,” says Hilary Hoynes, a professor of public policy and economics at the University of California, Berkeley. “When they’re older, their health is better. They’re less likely to be engaged in criminal activity, and they live longer. And all of those things are great for the child, but they’re also great for society.”

The stimulus will reduce the poverty rate overall. 

“Overall, these policies would reduce the poverty rate by 3.6 points, to 9% — which would be below pre-pandemic levels and lift nearly 12 million Americans out of poverty, according to an analysis published by researchers at Columbia University’s Center on Poverty and Social Policy.”

“The child-poverty rate would fall by 51%, the largest drop relative to other groups, to 6.6%, lifting more than 5 million out of poverty, according to the Columbia analysis”

In the Los Angeles County neighborhood of Pacoima the stimulus checks and child tax credits should come as a long lost blessing. This suburban town in the San Fernando Valley has an insidious type of poverty and homelessness: the type where families double up in housing or live garages. The type of poverty where a house can sell for a half million dollars. 

“Los Angeles Unified, the second-largest public school system in the country, is more than a sprawling collection of campuses — it’s one of the nation’s largest depositories of child poverty. About 80% of the more than 600,000 students qualify for free or reduced-price meals. When I heard from Supt. Austin Beutner that nearly a quarter of the students at Telfair last year were classified as homeless”

“You don’t see sprawling tent villages on the streets around Telfair, and there’s little of the squalor so starkly evident on skid row and elsewhere. Poverty is quieter here. It lives indoors for the most part. To an extent, it’s hidden in the fabric of the suburban design, and for all the focus on homeless encampments in Los Angeles, far more people cope with cramped, inadequate, barely affordable housing.”

That is clearly the problem with Los Angeles. It is unlivable because it is unaffordable. And families and individuals need to get creative just to stay off the streets. 

“At Telfair, I asked to see the breakdown on the school’s 182 students who did not have homes of their own. Fifty-four percent lived “in another family’s house or apartment.” Thirty-one percent lived in rented garages. Eight percent lived in motels, shelters, vehicles or campsites. Another 7% had unspecified “other” arrangements.” https://www.latimes.com/local/california/la-me-california-poverty-suburbs-homeless-part1-20181125-htmlstory.html

Thank goodness for Joe Biden and for this Stimulus Bill but there are things that were not in it: like a $15 minimum wage, which is still poverty if one does the math. But it’s a beginning. 

A fifteen dollar minimum wage is just a tad over $31,000/year on a 40-hour week. Shame on Senator Joe Manchin for preventing folks from simply being pulled out of the sinkhole to be left bobbing in the deep water hoping to swim! We have to continue to do better for people. It’s just that simple. Everyone deserves to live in dignity and with dignity comes the ability to live up to one’s potential.

“Senator Joe Manchin prevented this act from including an increase in the federal minimum wage, to fifteen dollars per hour. Even if that had passed, though, it would not have been enough. To significantly ease inequality, we need a much bigger, historic reframing of how we think about work and employment and equity. The minimum wage is a part of that, a necessary and important part, but alone it is not sufficient.”

Then there is the growing gig economy: self-employed folks who provide goods and services. Where do they fit into the minimum wage conversation and the protections provided by employers? 

“We need a new mental, public-policy, and legal framework for understanding how opportunity, compensation, and abuse are distributed.”

“This bill didn’t do that. But a fight like this takes time, though hopefully not generations. We need to find ways to share risks and rewards; to offer health care, retirement benefits, and more for people who don’t have a single full-time employer; to guarantee a living wage for those who don’t make an hourly one, as well as for those who do. It’s not entirely clear how that will happen. That’s why it’s a tricky problem. And it requires a rethinking of the relationship between working people, those who pay them—companies and gig customers—and government.” 

Hopefully in time, sooner than later, the gap will close, between the have nots and the have the rent and the car payment and the repairs but it will take more than just one party pushing the vote though. It has to take the naysayers to acquire something that money does not buy: empathy. 

Lastly, for anyone who is curious how the 1.9 trillion is allocated you can peruse it here: https://fromthetrenchesworldreport.com/heres-the-line-items-on-the-2-trillion-dollar-stimulus-deal-the-government-just-paid-the-government/283185

https://www.crfb.org/blogs/whats-19-trillion-house-covid-relief-bill

https://www.usatoday.com/in-depth/news/politics/2021/03/04/how-much-money-each-state-would-receive-if-joe-biden-covid-stimulus-bill-passes/6892464002/

Author: Sherri Margolin (Dark Matters)

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