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Where Did My Stimulus Money Go? And Will We Get Another Payment?

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stimulus money

I mentioned recently that I had been wondering where my stimulus check was? I ended up receiving it in the mail. Apparently since I file my taxes through TurboTax, the government didn’t have my direct deposit information on file. I was grateful to receive that stimulus money. However, I live in the state of California. That money is already long gone. Here we are in a new month and, like many people across this nation, I’m wondering if we are going to receive another payment.

Stimulus Money Goes Further In Some States Than Others

As most of you are well aware, the government issued stimulus money for many citizens in response to the COVID-19 financial challenges. Individuals earning less than $99,000 (or couples earning less than $198,000 combined) were eligible to receive the first round of stimulus money. The amount was $1200 for many people with a smaller amount for those earning between $75,000 and $99,000. Parents received additional small payments per child.

I am grateful that I received that $1200. There are some people who still have not received that first stimulus check. I was lucky to get mine. I needed it for bills. But the fact is that $1200 goes a lot further in some places than in others. This money is supposed to help people pay their rent and other bills. My rent for my one-bedroom San Francisco apartment is nearly $1900. That’s a lot lower than it would be if I had moved into my place more recently; I’ve got rent control in a spot I’ve been in for over eight years. Nevertheless, you can do the math. $1200 in stimulus money left me $700 short of rent. It certainly didn’t leave anything for other critical bills.

The States Where Stimulus Checks Stretch Most and Least

I am fully aware that I live in one of the most expensive cities in the country. In fact, the cost of living is high across the whole state. In a report from USA Today, California ranked second in a list of places where stimulus money goes the least far. Other states where a $1200 stimulus check doesn’t even cover the average rent or mortgage payment include Massachusetts, New York, New Jersey, and Hawaii.

In states where rents are lower, people can get by better with the $1200 (or $2400 for couples plus $500 per child). The five states where stimulus checks will stretch the furthest are Mississippi, Arkansas, Oklahoma, West Virginia, and South Dakota.

Will Americans Get More Stimulus Money?

The government acted quickly in the face of COVID-19 to get billions of dollars in checks out to American citizens. But, as the numbers above suggest, it might not be enough. Many people, particularly in states where the money doesn’t stretch so far, aren’t sure how to keep paying the bills. In states that continue to shelter-in-place, a large percentage of people simply can’t go to work. That leaves a lot of us wondering if Americans are going to get more stimulus money.

Chances Are That Yes, We Will Get Some Type of Help

There is a lot of conflicting news about whether or not we will receive additional stimulus money. Lawmakers are extremely divided about if, how, and when to release a second stimulus check. That said, most reports indicate that some type of additional assistance is likely in the near future.

Just what that looks like remains unclear. Generally speaking, Democratic leaders are in favor of issuing more stimulus money and doing so quickly. In contrast, Republican leaders are calling for a slower approach, releasing less money perhaps to fewer people. Overall, it’s starting to look like the next round of assistance may take a form other than a direct check to Americans.

Suggestions on the Table for More Stimulus Money

Here are some of the suggestions lawmakers are considering when it comes to giving Americans more stimulus money:

$2000 Per Month

Two different proposals exist that would give Americans earning less than a certain amount the right to receive $2000 checks every month:

  • California’s Ro Khanna and Ohio’s Tim Ryan are calling for anyone over age 16 earning less than $130,000 to receive a $2000 check every month during the pandemic
  • Michigan’s Rashida Tlaib and Washington’s Pramila Jayapal have proposed the Automatic Boost to Communities Act which would give every American $2000 per month throughout the duration of the pandemic. Moreover, it would give $1000 per month to every American for one year after the pandemic ends.

Many Americans would love to see these suggestions enacted. However, as of the writing of this post, Republican leaders aren’t on board with giving out this much new stimulus money. In fact, they don’t want to give out direct stimulus checks at all. Therefore, these monthly checks seem increasingly unlikely.

Stimulus Check Tied to Payroll Tax Cut

President Trump is calling for a payroll tax cut. In other words, he wants to give a tax break to businesses as part of the next round of COVID-era relief. Some reports indicate that he supports indicate that he may be willing to support a direct stimulus check to individuals (amount unknown) if it is tied to a payroll tax cut. Other reports indicate that he wants to discuss a payroll tax cut first, leaving the direct stimulus check out of the conversation.

Expanding Aid to States

Increasingly it seems that the conversation is turning towards expanding other aid programs including money from the federal government to the states. Even the Democrats are turning their attention to the immediate need for further assistance with food stamps and unemployment funding. Many argue that this money is as critical, if not more so, than a second stimulus check. Moreover, it’s likely to receive more support from Republicans than a call for more direct stimulus money.

What to Do While We Wait to Find Out More

Things are up in the air right now. We simply don’t know if we are going to get more stimulus money. We can’t count on it. So, what should we do in the meantime? If you are struggling to make ends meet during COVID-19, review all of your options for relief. Check with your lenders about mortgage forbearance, skipping a month of payments, and other hardship options. If you qualify, apply for unemployment assistance and food stamps. Hang in there. The lawmakers are working on it, despite the fact that they are divided on how to proceed.

 

Are Democracies Better At Fighting Outbreaks Like Coronavirus?

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Democracies better at fighting outbreaks

In short, yes. Democracies are better at fighting outbreaks, such as the coronavirus. As soon as the first cases of the virus were made known in America, health officials were immediately working to provide them with treatment. In China, many people are being quarantined with no treatment at all, leading to the deaths of hundreds of people. But why are democracies better at fighting outbreaks?

How China Handled the Outbreak

While it does seem democracies, like the United States, are better at fighting large-scale outbreaks, Chinese officials did everything they knew how to contain the virus. They quarantined entire cities, suspended travel, and closed schools and businesses. Officials also placed restrictions on citizens, making many of them stay indoors at all times.

Within 10 days of the outbreak being known to health officials, specialized hospitals were erected. They have also been able to keep close surveillance on the citizens to scale up any contact tracing. However, it just hasn’t been enough to fight the coronavirus off.

Are Democracies Better At Fighting Outbreaks?

As of now, there are 34 known cases of coronavirus in the U.S. Health officials in the states have been upfront with the citizens of the country to be sure they know potential warning signs of the virus. Anyone with the virus has also been quarantined.

This is the biggest advantage the U.S. and other democracies have compared to authoritarian governments, like China. When something like this happens, officials are able to provide full transparency. In China, on the other hand, officials tried to cover up how many cases of coronavirus there were. They also tried to hide how serious the epidemic was.

In addition to having transparency and the trust of the people, health officials in the U.S. also have the resources available to them to work on a vaccine or treatment. Because China underreported the number of cases, many health officials are tied up with treating current patients and disposing of those who have perished from the virus. The resources for developing vaccines or treatments just aren’t there.

Democracies also typically lead the world’s efforts in fighting such outbreaks. In 2014, the U.S. led other countries to stop the Ebola outbreak plaguing many African countries. President Barack Obama had 44 other countries join him in Washington, D.C. to establish the Global Health Security Agenda, which now consists of 67 nations.

They Don’t Do Everything Right Though

Although democracies typically handle outbreaks better than developing countries, they aren’t perfect. During the 2014 Ebola outbreak, a nurse was forced into quarantine in the Newark airport with no medical cause. She was only quarantined because she’d been to a country where the outbreak was occurring. However, when this happened, U.S. citizens stood up for their rights and developing new quarantine procedures only instilled even more trust in the public healthcare system.

In short, democracies are better at fighting outbreaks simply because they are able to be transparent and typically have more resources for developing treatments.

Do you agree? Are democracies better at fighting outbreaks? 

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How Will The New Budget Deal Impact Your Finances?

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new budget deal

According to a new HarrisX poll, 27 percent of Americans believe the new budget deal won’t have any direct impact on their finances, which is likely true. Here is what other Americans think about the deal and how it may impact the economy.

What Americans Think About The New Budget Deal

HarrisX surveyed 1,000 registered voters between July 27 and July 28 to get Americans’ thoughts on the latest budget deal. The poll also found that 14 percent of Americans think the deal would actually improve their finances, while 16 percent believe it will worsen their current financial situation.

Not all Americans have made up their mind regarding the latest two-year budget though. Around 42 percent reported they need more information before deciding how it will impact them. Fifty-one percent of independents who participated in the poll said they’d need more information. Some Democrats (41 percent) and Republicans (34 percent) felt the same way.

There is a small divide when it comes to political parties as well. Republicans were more likely to think that the newest budget deal would help improve their financial situation (24 percent). Only 14 percent of Democrats and 5 percent of independents reported believing that to be true.

Around 22 percent of Democrats polled said they thought the new budget deal would likely hurt their finances (compared to 12 percent of Republicans and 14 percent of independents).

About The Latest Two-Year Budget

The new budget deal is shooting to increase federal spending and borrowing limit over the next two years. According to The Hill, this includes raising military and domestic spending by more than $320 billion. President Trump signed it into law on Friday, despite resistance in the Senate. In fact, more than 20 Republican senators voted against it.

Many people opposing the deal argue it isn’t focusing on decreasing federal spending as we should be.  Even though spending is typically a good thing for the economy, the latest budget changes would add about $2 trillion to the national debt over the next 10 years. The national debt has already increased by $2 trillion since Trump took office in 2017.

Final Thoughts

When it comes down to it, many of us won’t recognize any immediate (or large) impact on our finances. However, you may see increases in your taxes over time. Many people who are self-employed or those who are in a higher tax bracket may find they are paying more in than they have in past years.

But, when it boils down to it, many people won’t see a huge impact on our personal finances. The U.S. government, on the other hand, is continuing to increase the national debt. If this continues, our economy won’t be able to hang on for long.

Readers, what do you think about the new budget deal? How do you think it will impact your finances

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What the New Lower Federal Interest Rate Means

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What the New Lower Federal Interest Rate Means

Interest rates are going down. The Federal Reserve has reduced its federal interest rate by 0.25%. The overnight lending rate is the basis for lending between banks and affects the rates offered to consumers for various loans. The last rate cut was almost twelve years ago after the real estate bubble burst in 2008. Conversely, rates have been raised nine times in nearly four years.

What is the Federal Reserve?

The Federal Reserve, or the Fed, was created in 1913 to stabilize the financial system in the United States. It’s also known as the central bank of the US and one of the most powerful financial institutions in the world. The Fed controls the monetary policy for the US. Its mandate, set by Congress, is “maximum sustainable employment, stable prices, and moderate long-term interest rates.” The Fed uses increasing and decreasing interest rates to combat the effects of inflation and stimulate the economy.

Reasons for the Decreased Federal Interest Rate

This latest reduction is said to mitigate global risk amid worsening relationships and trade concerns. The stock market and the current administration wanted a more significant decrease of 0.50%. The stock market reacted negatively to the news since lower rates present a weak economy. The S&P 500 decreased over 1%, to its lowest point in the last two months.

The Fed Chairman, Jerome Powell, alluded to the possibility of more cuts. However, there are no long-term cuts planned. The rate decrease was to prepare for future economic uncertainties. The administration is not particularly happy with the initial reduction and blames Mr. Powell’s policy decisions for slow economic growth. However, unemployment has been low for quite some time, and inflation has been steady. Conservative decreases as a preventative measure may contribute to more prolonged results.

What It Means When Interest Rates are Low

Federal interest rates affect how much it costs to borrow debt. Consumers are more likely to make big purchases when rates are lower. The hope is that lower rates will decrease spending on debt and increase consumer spending elsewhere. Lower rates also incentivize businesses to take out loans for expansion, equipment, and other enterprising efforts. Rates usually are reduced when the economy is in a recession, so this an unusual situation. The economy is strong, yet the Fed decreased the rate. The Fed previously reduced the rate to combat recession in 2003. The rate was 1.25% then. The current rate range is 2 to 2.25%

If you’re looking to finance a property, a car, or business expenses, now may be the time to strike. Also, now be a great time to refinance. If you took out a loan within the last four year, when the rates were increasing, the lower rates might be especially appealing. You may see a significant reduction in your monthly payments or total interest paid over the life of your loan. However, don’t feel pressured to accrue unnecessary debt because rates are low. The economy and markets are cyclical. Stick to your goals and financial plan.

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Can Senator Warren Really Really Wipe Out $640 Billion in Student Loan Debt?

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student loanAs April 2019 drew to a close, Senator Elizabeth Warren revealed an ambitious plan to help American families overcome student loan debt. If the plan was implemented, about 75 percent of Americans with student loans would see their debt vanish. For another 20 percent, at least some of their student loan obligation would disappear. But can Senator Warren really pull it off?

Senator Warren’s Student Debt Cancellation Plan

Senator Warren – who is also campaigning to be the next president of the United States – has a bold plan for tackling the student debt crisis in the United States. She wants to cancel up to $50,000 in student loan debt for any American household earning up to $100,000 a year. For approximately 75 percent of student loans holders in the U.S., that would mean cancellation of all of their remaining student loan debt.

However, 95 percent would at least get some degree of relief. If a household earning less than $100,000 had over $50,000 in debt, the plan would dismiss at least $50,000. For example, if a qualifying family had $65,000 in student debt, only $15,000 would remain after $50,000 worth was canceled through Senator Warren’s plan.

Additionally, partial debt cancellation for households that earn between $100,000 and $250,000 a year would also be available. The value of the cancellation would decrease by $1 for every $3 earned over $100,000. For example, households with incomes of $160,000 would get $30,000 of their student debt canceled. At the $190,000 annual income mark, the family would see $20,000 of their student loan debt wiped away.

Households with federal student loans wouldn’t even have to take action. Since the government has access to their loan and income data, it could be handled without the family having to take any steps. Private student loan debt would also be eligible in the plan, but the government would need to work with borrowers to get the loan details and coordinate the debt elimination with the lenders.

Many lower- and middle-class families struggling with student debt would get some relief, especially since the debt elimination wouldn’t be taxed as income. Senator Warren equated the plan to “an enormous middle-class stimulus that will boost economic growth.” And she didn’t stop there. If her plan was implemented, about 42 million Americans would at least get partial relief from their student loan debt.

Senator Warren’s Free College Plan

Another part of Senator Warren’s policy that could have a massive impact on American families is her plan for universal free college. She wants to make two- and four-year public colleges available without any tuition or fees, significantly limiting how much a person would have to spend while pursuing higher education.

While that plan might not bring the cost of college to zero – as it does not address other expenses like room and board or supplies – to say it would make a substantial difference would likely be considered an understatement.

The Drive for College Degrees

Many Americans believe that a college education is critical for their future success. One 2012 Pew study showed that 94 percent of parents with children under the age of 17 expected their kid to go to college.

Additionally, it is widely known that individuals with college degrees generally earn more than those who stop going to school after receiving their high school diploma. Those who have a four-year degree earn about 26 percent more than those with two-year degrees and college graduates bring in 56 percent more than high school graduates.

Employers are also increasingly seeking out workers with college degrees. One study by Georgetown indicated that 65 percent of jobs in the US would require at least some level of higher education by 2020.

Paying for Senator Warren’s Plan

Most who oppose Senator Warren’s plan first point to the price tag, which is estimated at $1.25 trillion over 10 years for both the debt elimination ($640 billion) and universal free college components. To put it simply, eliminating that much student loan debt and making college free wouldn’t be cheap. However, Senator Warren says she has a plan for that too.

She would like to fund her plan through an “Ultra-Millionaire Tax.” Families with $50 million or more in wealth – a total of about 75,000 households – would be subject to a 2 percent annual tax, which Senator Warren says would cover universal free college and the debt cancellation.

However, many legislators believe that Senator Warren’s plan is just too expensive. Additionally, some think it would be unfair to erase student loan debt when so many others have already paid off their hefty loans.

Concerns about ensuring schools would control their costs have also been expressed. Since 2001, tuition at four-year institutions has risen over 100 percent (including after being adjusted for inflation).

Can Senator Warren Wipe Out Billions in Student Loan Debt?

In her position as Senator, she does not have the power to move ahead with this plan alone. She would need significant backing from Congress and the President to turn this vision into reality, as it would have a massive impact on the budget.

If Senator Warren was elected in 2020 to become the next President, she could also then try to push this plan forward. However, since it would involve updates to the tax code (to implement her Ultra-Millionaire Tax), changes in the US educational system and funding dedicated through the federal budget, putting it into motion without the support of Congress would incredibly unlikely.

Now, if Senator Warren did garner enough support – either while in Congress or if she becomes President – then wiping out that student loan debt isn’t impossible. Similarly, making public college tuition and fee free is technically something that could happen. It’s just important to understand that there is a long road ahead if that is a plan she wants to implement and, without the proper support from other key government officials and legislators, it probably won’t become a reality.

Are you struggling with student loan debt? Do you think Senator Warren’s plan is a good idea? Tell us about your experience an share your thoughts in the comments below.

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January Jobs Report Shows Growth Despite The Shutdown

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January jobs report

The January jobs report was released on Friday and, despite the government shutdown, there was growth in the job market once again. This marks 100 months of consecutive growth. President Trump took to Twitter to celebrate the latest Trumponomics triumph.

The Job Market Post-Government Shutdown

Although there were another 304,000 jobs added to the market in January the employment rate went up slightly. There is no doubt this is due to the fact that many government workers were forced to file for unemployment or assistance during this time.

That being said, many people were pleasantly surprised by the post-shutdown jobs report. It showed the economy added 304,000 jobs during the first month of the year. The number 304,000 does not reflect any jobs impacted by the shutdown because the Labor Department knew those individuals would be paid eventually and, therefore, were reported as gainfully employed.

What Did The January Jobs Report Say?

The unemployment rate was up due to government workers not able to collect a paycheck. However, it only increased by 0.01 percent from December. There is speculation that the unemployment rate should have actually been higher (4.1 percent).

Another note to take away from the January jobs report is the number of people taking on part-time jobs increased. This was likely due to people being out of work during the shutdown. The Labor Department reported that 490,000 more people were working part-time in January but were searching for full-time work. So, there is still plenty left to be desired where the United States job market is concerned.

Despite the continued growth in the job market, the government shutdown did have a real impact on 800,000 workers in the U.S. Some people were unable to pay bills or put food on their table. Not to mention, the unemployment rate is on the rise again (largely due to the shutdown). And, if no agreement is made soon, it will happen again.

Readers, what do you think about the possibility of another shutdown? What do you think the long-term impact may be?

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