It’s impossible to look at the current state of the U.S. economy without considering the impact that last year’s relief bills had on everyday American consumers.
And the news is generally good.
In short: The $2.2 trillion stimulus bill passed in March 2020 keptheads above water for almost four months.
By the numbers: Researchers at the Federal Reserve Bank of San Francisco recently released a study on the effects of the CARES Act. Leveraging data from the Census Bureau, the researchers confirmed that the stimulus package added 19 weeks of financial “resilience” to Black and Hispanic households. Their “financial resilience” measurement is based on how long a household could maintain its typical consumption with non-employment income and liquid assets.
This research comes when the labor market continues making dramatic changes and policymakers are considering another expansion of federal spending for job-creating infrastructure projects.
Quote: “The sharpest declines in hardship immediately followed the passage of these two relief bills.” — Fed researchers, of the first two rounds of relief.
Unemployment made the difference.
But, above all, it was the supplemental $600 weekly unemployment benefits that made the biggest impact. That supports the assertion that the CARES Act provided vital financial assistance to those most in need of help.
One crucial detail included in the report is the psychological effects of the stimulus programs on the population. University of Michigan researchers tracking census data reported a measurable 20% drop in reports of community members reporting symptoms of depression and anxiety.
Takeaway: When assessing the effectiveness of government spending to positively impact community health and financial resilience this research provides an outline of the most effective models when it comes to lending a hand to our neighbors. Now we’re startingt to see the true impact of the 2020 bills. What comes next is still an open question.
