After an extended Fourth of July break, lawmakers are back at work in Washington to discuss the possibility of providing a second stimulus check.
Unfortunately, coming to a consensus on whether to provide Americans with another coronavirus payment won't be easy. In fact, some key Republicans have expressed growing concern about the possible price tag associated with more coronavirus relief even as Senate Majority Leader Mitch McConnell indicated several proposed bills will soon be introduced.
Despite the conflicts in Washington, chances are good that a second stimulus bill will pass sometime soon -- and one statistic indicates the very unfortunate reason that's the case.
Around 181 million people live in states that are closing down again
When Congress authorized the first stimulus check, lawmakers were pushed to act quickly because the country was in crisis. Across the United States, millions of businesses had to shut their doors and hundreds of millions of people were forced into their homes because governors and local officials put cities and states on lockdown.
Unfortunately, history is repeating itself when it comes to closing up America as the nonpartisan Center on Budget and Policy Priorities now reports over half of the U.S. population lives in a state that either paused its reopening plans after trying to get the economy going or that has actually tightened restrictions again after loosening them. In fact, more than 181 million Americans live in the 22 states that have had to pause or roll back reopening plans. That's a huge -- and devastating -- number.
If this trend continues, things could actually get worse this time for a few key reasons:
- Businesses that survived the first shutdown may not be able to survive a second one -- especially if they purchased inventory in preparation for reopening but will now lose the value of it because they've been ordered closed again.
- Individuals may have used up whatever financial reserves they had available during the first shutdown, including spending the first stimulus check, and they're now faced with a second shutdown so soon after (perhaps before even getting back to work).
- The fact that cases surged so quickly and states were forced to shut down again within weeks of reopening suggests this problem will persist for a long time. Economic recovery is likely to be very slow if that's the case, and a deep recession may continue until a vaccine or more effective treatments are developed.
With so many people likely to struggle financially and the potential for unemployment to surge again due to repeated business closures, Congress almost certainly needs to act quickly to provide relief. And a second stimulus check is the fastest way to get cash to those who need it.
You need to prepare for either possibility
With bipartisan support for a second stimulus payment and the president pushing for one, it seems hard to believe lawmakers won't reach a consensus and pass something, especially with more than 181 million people once again living under various stages of lockdowns.
But while you should keep up the pressure on lawmakers by contacting your representatives, you also need to make sure you've done all you can to be ready for a prolonged economic downturn without government help. The best way to do that is to hoard as much cash as you can. And if you have money invested in the stock market, make sure you'll be happy to hold your investments through a deepening recession that may very well be caused by more closures without readily available federal aid.