In the United States, Joe Biden will begin his presidency by paying “stimulus checks”



Joe Biden’s plan to support the American economy once again involves sending a check. This time, the planned sum is $ 1,400 per person (€ 1,150). It is the most spectacular measure of the vast ” safety plan “ which he detailed on Thursday, January 14 and which should mark the first act of his presidency.

→ READ. United States: Joe Biden presents a stimulus package of 1.9 trillion dollars

This payment should concern 80% of the American population, while the conditions to benefit from it are very broad. And once the measure is passed, it will be implemented immediately, with 5 to 7 million checks sent each week by the IRS (Internal Revenue Service), the government agency that collects income tax.

The United States had already adopted a first plan last March which provided for the payment of 1,200 dollars (990 €). A second plan, in December 2020, provided for a sum of 600 dollars (495 €).

Putting “helicopter money” into practice

The American media called these payments “Stimulus checks”, which can result in “Stimulus checks”. It is about helping people in difficulty but also reviving the economy by supporting consumption. It is the budgetary transposition of the idea of “Helicopter currency”, conceived by Milton Friedman, the monetarist economist, in the 1970s. He imagined that money created by the central bank could be distributed by helicopter to help growth.

When the first support plan was adopted in March, Donald Trump, then in the midst of an election campaign, insisted that the payment take the form of a check, signed in his name. This was done even if part of the payments went rather through transfers for practical reasons.

Below € 61,000 in taxable income, everyone benefits

The first payment was sent to each taxpayer whose declared income was less than $ 99,000 per year (€ 81,600) or $ 198,000 for a couple (€ 163,000). Some 83% of U.S. tax households have benefited at a cost of $ 267 billion.

→ READ. Donald Trump rejects congressional stimulus package and calls it “shame”

The second and third installments slightly lowered this resource limit: $ 75,000 (€ 61,800) for an individual, $ 125,000 for a couple (€ 123,600).

The Biden plan plans to expand the benefit of this check to new categories: students under 17, immigrants and dependent adults of a household who had been excluded from previous payments.

The idea of ​​paying money in this way is mentioned in many countries, including France. Each time, it is more a question of limiting expenditure to certain categories of essential products. This is not the case in the United States, where recipients can use the money as they wish.

The richest Americans rather saved

The Biden plan also includes housing benefits, food stamps for the poorest, aid for the unemployed and students, support for schools and communities that are overwhelmed by the consequences of the Covid-19 epidemic. All the measures announced represent a cost of 1,900 billion dollars (1,570 billion euros), or 9% of GDP. But within this vast package, the direct payment of a sum, at once, is the measure that has the fastest effect.

In fact, 80% of people interviewed by the Census Bureau last June said they had used this money to meet essential expenses: food or payment of rent. However, 14% said they intended to save it.

All the measures adopted in the spring resulted in a 10% increase in average income in the United States, in the 2e quarter of 2020 and an increase in savings of the order of an additional $ 1,424 billion over the first ten months of the year. This is twice as much as in ordinary times.

The economic recovery in 2021 will largely depend on whether households choose to spend this money when the epidemic has been brought under control, rather than leaving it in their savings account.

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