COVID-19 stimulus. To put it mildly, the Coronavirus pandemic had a massive impact on the economy. Before COVID-19, it would be difficult to imagine a scenario where 20+ million people would lose their jobs in the span of a month! But it happened, and the chief action taken by the US government was to give money directly to taxpayers. The amounts are $1200 per person, or $2400 for married couples filing jointly – a nice chunk of change, but not enough for folks who will likely be out of work for several months.
And let’s not forget how millions of people lost their health insurance, but that’s another story.
The decision to distribute funds was made quickly, which was good, but the biggest challenge was deciding who gets what. To improve the chances that stimulus money reached the people who need it most, the government set an earnings limit where people with higher incomes receive a smaller share, or nothing.
Giving money is never easy. The government cannot precisely determine who has the strongest financial need, or who would benefit most from a stimulus check. For instance, the stimulus checks are not conditioned on current employment status, or personal savings accounts. This is not a criticism of the government’s approach; it’s a very complicated problem. The end result is a system that gives roughly equal dollar amounts to millions of people with unequal needs.
It’s important to point out that people who live in a particular community often have the best understanding of financial need in that community. I know some of my neighbors probably need at least $8,000 to get through several months of unemployment, while my other friends did not lose their jobs, have sufficient cash on hand, and deposited their stimulus checks into savings accounts.
A community does not have perfect knowledge of everyone’s needs, but much more so than government. Of course, this depends on the tightness of the community; in some places in the US, people rarely make the effort to know their neighbors. And in other areas, “community first” is the rule.
My recommendation. If you don’t need your stimulus check, give the money to someone in your community who does need it. Choose someone you know relatively well, or is recommended by someone you’re close with. It’s important not to waste your stimulus money, so you should carefully consider a potential recipient’s needs. And remember, the purpose of the stimulus money is to help you through these rough times, and not to end up in your savings.
If more people were willing to take it upon themselves to identify genuine need in their communities, and give money to who needs it most, then the impact of the stimulus would be maximized. This is something the government cannot do very well.
When it comes to COVID-19, nobody has all the answers. But one thing is certain – we need to hold on to our spirit of cooperation, or things will get worse. We must not lose that.
~ James
