CHARLESTON, S.C. (WCBD)- More than 90 million Americans have received their stimulus checks as part of President Joe Biden’s American Rescue Plan. In order for that money to actually “stimulate” the economy, experts say it has to be spent.
Frank Hefner, an economist and professor at the College of Charleston, describes stimulus checks as a metaphorical “defibrillator” to the economy.
“That might get your heart going but the question is: will it keep it going? And the problem with the stimulus is that it’s that one BANG — and that’s not going to be what makes an economy sustainable,” says Hefner.
He says in order to keep the economy’s heart beating, consumers have to buy goods and services. However, in President Joe Biden’s recent address to the nation, he mentioned a number of different reasons an individual or family may spend their stimulus money.
“It extends unemployment benefits, it helps small businesses, it lowers healthcare premiums for many, provides food and nutrition and keeps families in their homes,” says President Biden.
In a national survey, over half of Americans say they will be cashing in their checks for food, about 44% on utilities, and 35% on household supplies.
At the same time, others plan to use the money towards paying off debt and housing. According to Hefner, it’s too soon to tell whether or not this type of spending, or other spending not related to goods and services, could impact the economy.
“If it’s going to the stock market, that’s not the same thing as giving someone a job in a restaurant. If it’s going to pay down credit card debt; a very worthwhile thing to do no doubt about that. However, whether it does any “good” in the sense of spurring gross domestic product or hiring more people, that remains to be seen,” he says.
Whether you plan to put your check into the bank, use the money to put food on the table or even spend it right away, Hefner predicts it may take more than stimulus spending to get the economy back on track.
“There’s gonna be a lot of debate on this — but will it accomplish it’s purpose? That remains to be seen. And to what extent? That really depends on how YOU are going to spend your check,” says Hefner.
Millions of Americans are still waiting to receive their checks via direct deposit and by mail. To check the status of your payment, click here.