Democrats and economists largely agreed with Trump.
Economists argue that after nine months of waiting for another lifeline, the aid is not enough to cover basic necessities and past-due bills many families have accumulated over this difficult year.
“People are facing evictions, utility disconnections and continued struggles in the labor market dealing with the virus,” said Olugbenga Ajilore, senior economist at Center for American Progress, a left-leaning think tank. “While a one-time check of $600 is better than nothing, it’s woefully insufficient as relief, let alone as stimulus.”
Many Americans agree with the president, too. People flocked to Twitter to chime in with their dissatisfaction and crude humor on the recent round of relief. It resulted in #LetThemEatCake and #600IsNotEnough to trend on the social platform on December 21.
‘It’s not enough’
Several economists said that the one-time direct payment of $600 wouldn’t be enough for those families and the unemployed, who may be in need of funds to buy groceries and make up missed payments and interest.
“Although the stimulus is a welcome and necessary development and will help on the margins, for many Americans it’s too little too late and more help will be needed,” said Tendayi Kapfidze, chief economist at LendingTree.
On the contrary, economists consider $2,000 checks to be “more helpful” for the millions of families in need. But they add that more than just a bump up in stimulus checks is needed.
“We need state and local aid,” said Ajilore, citing the more than 1 million public sector jobs that have been lost as a result of budget shortfalls from the virus. “We need an expansion of paid leave provisions along with child care funding as women and caregivers generally have suffered during this pandemic.”
The organization also estimates that if Congress had reinstated the full $600 in unemployment payments, it would have created or saved 3.3 million jobs over the next year. It predicts the current $300 will only create half of those jobs, even if it was extended over an entire year rather than 11 weeks.
“The strength of the economy and how long it takes is in Congress’ hands and will be determined by how they act,” said Heidi Shierholz, senior economist and director of policy for the Economic Policy Institute.
The economic recovery
As for the broader economy, some analysts say $600 stimulus checks fall short of the level of aid needed to stimulate the economy and reverse the economic damage inflicted by the virus — especially with a brutal Covid-19 winter ahead.
“It will not curb the damage as $600 is not enough to mitigate months of economic pain,” said Ajilore. “The biggest problem is that even with a vaccine, the virus spread is at its worst point during the pandemic and that has caused the economic problems.”
The $600 direct payments, in total, will cost the federal government $166 billion. It’s a $127 billion decrease from the $293 billion paid out earlier this year by the CARES Act, making up less than 1% of GDP, according to Kapfidze, who predicts the direct boost to the economy will be less than 1% growth.
On Wall Street, economists such as those at Morgan Stanley have a rosier view on the $600 stimulus, in part because the new stimulus package arrives at a time when the unemployment rate is significantly lower than the height of the pandemic, sitting at 6.7% in November, compared to the unemployment rate of 14.7% in April.
“The second round of support is less than the first but it comes at a time when we are further along in the economic recovery,” said economists Sarah Wolfe, Ellen Zentner and Robert Rosener in a research note. “It will help support consumer confidence and incomes as we wait for a widespread vaccine.”
— CNN’s Tami Luhby contributed to this report.