Source: Dr. Mike Walden, NCSU COLLEGE OF AG & LIFE SCIENCES, 8/12/20


MARY WALDEN:
“Today’s program asks how the stimulus checks were used. Mike, we now have information on how the first round of stimulus checks to households were used. Are there any surprises?”

MIKE WALDEN:
“And what these were were the $1,200 per person, or $2,400 per household checks, that most individuals received. People above $75,000 for single income, or $150,000 for households, did not receive. Everyone else did receive them. They came directly from the federal government, and there were no strings attached.”

“Now what the federal government wanted to do was help people with their expenses who may have been financially hurt during the coronavirus recession. Also, they wanted that money to be spent, and that would reverberate through the economy and help the economy recover. Well we now have data that show how that money was used, and 85 percent of the money was actually spent on household expenditures like mortgage, or rent, the light bill, et cetera. The runners-up were paying down on debt and saving. Also, households with lower incomes spent a much higher percentage of their stimulus checks on their household needs.”

“So I think we can say that this program was a success if it was, number one, aimed to help people, and, number two, aimed to stimulate the economy through spending.”

Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in
the Department of Agricultural and Resource Economics at North Carolina State University who
teaches and writes on personal finance, economic outlook and public policy.