How likely are stimulus checks to be used in this recession? Economists weigh in

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In economic downturns, the U.S. government has a number of levers it can pull to keep families spending and shielded from the most dire situations. Continued spending is key, because if people’s buying slows or dries up, companies respond to lowering profits by laying off even more workers, which only deepens and prolongs the hard times.

Relief strategies include enhancing unemployment benefits, boosting food stamps, temporarily slashing taxes and sending out stimulus checks.

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Sahm points out that stimulus checks have unique advantages compared with other forms of aid.

For one, they get to people quickly.

“The bottom falls out in a recession, so it’s important to blunt the fall,” Sahm said. “Checks do that well. The second and third rounds went out within days.”

“No other relief program came anywhere close.”

The payments also stimulate the economy in a short amount of time, she said. “Research on the stimulus checks shows that people spend about half of the checks, and they do so quickly.”

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The fact that some believe “the high inflation we are experiencing was partially a consequence of sizable government transfers may mean there is less will for [the payments] in the immediate future,” Vavra said.

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