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Are Stimulus Payments Gone for Good?

Young family smiles while looking through mail.

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For months on end, financial experts have been warning consumers to gear up for an economic recession. The Federal Reserve itself even said recently that a recession could hit in 2023 and last for a couple of years.

The last time economic conditions took a serious turn for the worse, lawmakers were pretty quick to approve stimulus payments to help Americans keep up with their bills. But are those stimulus payments gone for good? Or could they make a return if a recession hits later on this year?

It’s a matter of how bad things get

Lawmakers have historically turned to stimulus payments during periods of extreme economic turmoil. Consumers were privy to stimulus payments during the Great Recession of 2007 to 2009, and there were several rounds of stimulus payments issued during the pandemic.

But it’s important to note that during these periods, economic conditions deteriorated to a dire extent. And so while stimulus payments are not necessarily done, things would have to get really bad for lawmakers to agree to another round.

The last round of stimulus checks lawmakers approved came through in March 2021 as part of the American Rescue Plan. Following that bill, millions of Americans saw $1,400 checks hit their bank accounts.

But it’s important to understand that in March 2021, the national unemployment rate sat at 6%. This past June, it sat at just 3.6%.

Granted, that 3.6% jobless rate accounts for the fact that we’re not in a recession currently. If economic conditions were to decline, that rate would no doubt increase.

But either way, whether stimulus payments come to the table once again will hinge on how bad future recessions are. And hopefully, if a recession does hit later on in 2023, it won’t be too bad since the economy is currently in a fairly strong place.

In fact, while the Federal Reserve may be anticipating a 2023 recession, it also thinks such a decline will be mild in nature. That’s somewhat encouraging.

Don’t bank on a stimulus check

Given the potential for a near-term recession, it’s a good idea for consumers to take steps to prepare for one — namely, by boosting their savings. And one thing Americans should not do is neglect their savings and plan to fall back on an incoming stimulus check that may not arrive.

While it’s true that those checks have served as a lifeline in the past, they’re by no means guaranteed for the future. So those who want to weather any upcoming economic storm that hits should beef up their cash reserves while they can.

Boosting job skills is another important step to take in the course of being recession-ready. Doing so won’t always mean avoiding a layoff. But it could mean getting to keep a job when employers have to make cuts. It could also mean having an easier time finding a job after a layoff, which may be an important thing if a recession hits and there’s no stimulus aid to fall back on.

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