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Stimulus Money: Who’s Paying?

Over the last 12 months, most Coloradans have received one, two, or even three separate stimulus checks.

A family of four receiving all of them would have collected just over $11,000.

However, that money to individuals is only a small portion of the roughly $5 trillion in pandemic relief money approved by Congress since it began.

It started with the $2.2 trillion Cares Act, followed by the $900 billion Consolidated Appropriations Act, and finally the $1.9 trillion American Rescue Plan.

The money was intended to help families, businesses, and local governments cover their most essential expenses and increase spending to support the economy.

However, nearly everyone recently surveyed by KRDO Newschannel 13 didn't know where that money came from.

Dr. Daniel Johnson, a professor of economics at Colorado College who specializes in public policy, says government spending comes from three sources:

-tax revenue
-borrowing (from either American or foreign lenders)
-creating money from the federal reserve

"How are we financing this particular stimulus package? Well, it's a combination of those," he explained.

While the exact percentage of each source in the recent stimulus bills isn't clear, it's a certainty that the government will eventually have to pay it back.

Because of that, many lawmakers in Washington and many of the citizens interviewed by KRDO believe the stimulus bills were too large.

However, Dr. Johnson isn't so sure about that, saying, "I think it was wise, and I think the impact proves that."

To support that, he points to unemployment and claims that many economists feared the pandemic could have easily created the type of unemployment not seen since the Great Depression, when unemployment hit nearly 25%.

"We managed to battle the unemployment rate down from 15% this time last year to about 6% now. That is remarkable by any historical norm in any country."

Although prices of certain goods have spiked due to pandemic-related supply issues, inflation as a whole has only seen a slight uptick, due to the fact that most of the new government money is being used to support jobs and basic necessities.

Dr. Johnson's only real concern is the lack of time spent scrutinizing every page of these massive bills.

"It's been short, because the need has been urgent," he says.

However, despite the limited scrutiny, he feels both the timing and the total of the stimulus rounds likely prevented a far more serious setback.

No additional stimulus bills are expected.

President Joe Biden has instead shifted his focus to a massive trillion dollar transportation bill, which is not the same type of bailout, but also intended to get people back to work while also addressing major infrastructure needs across the nation.

Bart Bedsole

Bart is the evening anchor for KRDO. Learn more about Bart here.

Comments

5 Comments

  1. If you dive in a little bit deeper you will see that The Current Outstanding Public Debt of the United States is: $27,752,835,868,445.35 Last Updated: Friday, April 30th, 2021 Every man, woman and child in the United States currently owes $84,099 for their share of the U.S. public debt.
    https://www.davemanuel.com/us-national-debt-clock.php

  2. “Government spending comes from three sources”. If KRDO dug deeper and asked the author what the percentage of each of the three categories of spending that would shine a light on the larger problem, “creating money”. Also, reference the tax revenue portion, a very high percentage of US citizens do not pay income tax. According to the Tax Policy Center, 44% paid NO federal income tax in 2018; neither did Amazon or Nike. The working Middle Class citizens PAID for those checks.

  3. Every man woman and child. Does that include the 20 million illegals? So glad someone pointed out that 44 percent of the US population pay NO federal income tax. That does indeed put the burden on the remaining 56 percent, of which only only a tiny fraction are considered the “uber wealthy”.

  4. “President Joe Biden has instead shifted his focus to a massive trillion dollar transportation bill”…trillion dollar “transportation” bill? Wrong. Complete lie. It’s a $4-6 trillion dollar bill, of which a small fraction is truly infrastructure. When you have to redefine words like infrastructure – huge, glowing red flags!

  5. What many don’t realize about the federal deficit is that it’s not like a home loan that will be paid off one day. It’s debt that is continually being rolled into new debt. Once our creditors realize the US is a bad credit risk and raise the rates we are screwed. And this event can occur with very little warning.

    No one (including corporations) should have a $0 federal income tax bill. Everyone benefits from federal spending, everyone should pay. Anyone know how many of the 44% that pay $0 actually get $ back due to credits?

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