I saw this on Motley Fool: https://www.fool.com/taxes/2020/06/06/3-big-reasons-a-second-stimulus-check-is-likely.aspx.
Nothing substantial has changed since this article from several days ago. I left off the points about how a second stimulus package may play out as I think it’s too early to tell at this stage.
Jun 6, 2020 at 5:51AM
Over the past three months, the U.S. has experienced an unprecedented economic catastrophe brought on by the coronavirus disease 2019 (COVID-19) pandemic. With the U.S. becoming the epicenter of the outbreak, most states chose to shut down nonessential businesses to curb virus transmission. In doing so, we witnessed more than 41 million Americans get displaced from their jobs, as evidenced by initial unemployment benefit claims.
This never-before-seen level of disruption is what prompted Congress to pass and President Trump to sign the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27.
Three reasons a second round of stimulus is more likely than you might realize
The first reason Americans are likely to get a second stimulus check is because the first one simply didn’t do enough. According to an April 22 Money/Morning Consult survey, a whopping 74% of the 2,200 respondents noted that they had already spent their stimulus money, or intended to spend their stimulus payout in four weeks or less. That’s a problem, considering that the U.S. economy has been struggling mightily for 2.5 months, and the U.S. unemployment rate is soaring.
Secondly, don’t overlook the fact that it’s an election year. Neither the Republicans nor the Democrats want to be the party that refused to go to bat for the American public during the worst economic downturn since perhaps the Great Depression. Although both parties are approaching the idea of a second round of stimulus from opposite ends of the spectrum, both are well-aware that their actions could have bearing on the November elections.
Third and finally, things could actually get worse from an economic perspective before they get better. For instance, the expansion of the unemployment benefits program is putting an extra $600/week into the pockets of approved beneficiaries. However, this will end on July 31, 2020. Even though states are reopening in phases, it’s not going to be business as usual for quite some time. That means we could be talking about extended periods of high unemployment; rising rental, mortgage, and loan delinquencies; and a host of other economic issues. A second round of stimulus might be needed to keep the financial sector from face-planting in a couple of months.