Yahoo Finance’s Brian Sozzi breaks down why Congress would be wise to pass Trump’s $2,000 stimulus checks.
MYLES UDLAND: We did get the stimulus bill passed through Congress. $600 checks look set to hit consumer balances by the end of this week. Enhanced unemployment, $300 a week, that's going to be rolling out for the next 11 weeks.
Brian Sozzi, though, you were looking at some research on what might happen if those $2,000 checks that we know the president wants-- House Democrats have passed, you know, a plan to get $2,000 checks out. Doesn't really seem like it's going to go anywhere in the Senate, but, hey, you might as well consider. And, look, last time I checked, $2,000 is more than $600.
BRIAN SOZZI: Yeah, that's correct, Myles, and you know me. I love my large numbers in headlines. But let me run through these finer points from Jefferies economist Aneta Markowska. In a note this morning she noted $2,000 checks as opposed to $600 checks, that is a 1%-- that would be a 1% more boost to GDP next year. So that would take her estimate from about 5% currently for GDP to 6% next year, guys.
But this is very interesting, and I definitely want to get your thoughts on this, Myles. She notes that $2,000 checks, as the president has clamored for and the House, they passed out yesterday, could shorten the distance to full employment and the Fed's 2% inflation goal by two to three quarters. So, Myles, that could be-- that's impactful stuff by just increasing the amount of checks. Again, balancing inflation, but even still, pretty important number there.
JULIE HYMAN: Well, something I wanted to bring up as well, you know, we've been talking about throughout this whole pandemic the whole idea of the K-shaped recovery and the outcomes being very different for people who still have jobs versus people who do not. And I guess if you look at these checks it helps in the short term, but all of this talk and sort of navel gazing, if you will, about correcting systemic wrongs, whether it's racial injustice or economic injustice, this bill ain't it, right? It's putting a Band-Aid on some of those issues, but it seems like for all of the discussion about that, there hasn't really been any movement on that. We'll see if the next administration makes any moves in that direction, but there's been a lot more talk about sort of helping people not get evicted in the short term, for example, or helping people pay the bills in the short term and a lot less about fixing the bigger issue of wealth inequality it seems to me.
BRIAN SOZZI: You know, Julia, I had a good conversation yesterday at my local barbershop. Really some of the best conversations happen at the barbershop. And they were talking about the stimulus plan, and they were saying $600 is not enough for their families. You know, the guy who actually cut my hair, he has four kids. He said $600 is not going to help me. That's barely a trip to Target, Walmart, or Costco. These are real Americans voicing real concerns. And whether you agree with President Trump or not, $2,000 for families like that from my local barber would be a heck of a lot better than a $600 check that doesn't get the job done.
MYLES UDLAND: The thing I would add, though-- and I think that this is sort of where this all goes as we get through the next generation plus or whatever of politicians-- people in America don't have enough money considering the only thing that we deem of import in this country is having money. And so I think everyone wants to-- I actually think, in some ways, the folks who are focused on-- you know, like, let's-- it needs to be primarily about racial, you know, equity or whatever, that's kind of running interference on, yeah, but the problem is that we systemically make it such that people who are minorities tend to make less money and therefore have less opportunity because the only thing that really defines opportunity in this country, again, is money.
And so I think what's going to be really interesting is once you've given people two checks, a couple thousand dollars plus the enhanced unemployment, in nine months, how quickly do calls for that come back, especially if we now are working under this framework where, yeah, it's fine. That's what we do. We give our citizens money intermittently.
And I don't know. I'm kind of sitting here being like, man, I thought Andrew Young was such a joke a couple of years ago, and I think he's really on to something. I think there's a reason why he was as popular as he was considering he had no actual policy programs other than $1,000 check a month and managed to get, what, 5%, 6% of the vote in the Democratic primary. So big-picture stuff I think that we're going be talking about probably-- honestly, probably for the rest of our working life.