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The holiday season is going to look very different this year as COVID-19 cases spike across the country, and many local and public health officials urge Americans to skip in-person activities or at least limit the number of attendees.
Unfortunately, financial struggles are only adding to the troubles many Americans are facing this holiday season. A recent Gallup poll revealed many people plan to cut back on holiday spending unless they get a second coronavirus stimulus check.
This isn't just a problem for those who deserve a little holiday cheer after a tough year. It's also an issue for the economy as a whole, which depends on consumer spending to drive recovery.
Americans need more stimulus money to avoid holiday cutbacks
According to Gallup's recent research, 37% of Americans said they are planning to spend less this holiday season if there is no additional government stimulus payment. Of those who indicate they plan to spend less, nearly 20% said they will reduce their expenditures substantially, telling Gallup that they'll spend "much less" this season.
This confirms findings from other recent data collected by Gallup in which Americans indicated they expect to reduce spending on gifts by around $150 during the 2020 festive season compared with 2019. And, unsurprisingly, Americans who are already getting into debt or relying on savings during COVID-19 are far more likely to be planning cutbacks, with 42% of people experiencing these financial problems anticipating a significant reduction in their holiday buying.
If the government takes action and provides more stimulus money, however, fewer Americans will feel forced into these cutbacks. If a second stimulus check were to arrive before year's end, just 30% of Americans said they would cut back on their holiday spending. And the number of people who would increase their expenditures jumps from 16% up to 22%.
Consumer holiday buying impacts the economy
While it may seem odd to argue that the government should provide more stimulus money so families can buy more holiday gifts, the truth is that the economy relies on people spending -- especially during the holiday season. If people reduce their spending, companies may have to lay off workers, which will slow down economic growth and potentially deepen the recession and lead to more unemployment.
The fact is that business leaders and leading economists have all stressed the importance of a second stimulus check. And this latest Gallup poll confirms their fears that if D.C. politicians don't provide necessary coronavirus aid, consumer behavior will change in a way that causes economic damage.
Lawmakers should take heed of this data -- and move swiftly to pass another stimulus and get money into American's bank accounts, not just to help struggling families salvage the season but to ensure the country is on a path to economic recovery in the new year. Of course, if lawmakers don't act, those who are concerned about holiday cutbacks do have other options this year as there are plenty of fun alternatives to splurging on gifts.