Unpacking the Fiscal Stimulus

Market Pulse

In this episode of Market Pulse, we break down the second round of stimulus that took effect in late December. Who won? Who lost? And how will it impact the overall economy, as well as consumers and small businesses? We also discuss a potential third round of stimulus.

This transcription is edited for brevity. Listen to the full podcast for more great insights.

Theresa: Let's start with the current round of stimulus that took effect at the end of December. There are few more common elements of the package, such as the one-time checks, unemployment and PPP. I’d like to take just a few minutes to really dig down into these elements.

Cris deRitis: There are really three main components to that package. One was a pandemic relief, so there was some additional support provided to vaccine distribution, testing and tracing. And we know that it remains front and center in terms of resolving this current crisis and getting us to a place where the economy can grow. So the pandemic has to be dealt with first, first of all. But in addition to that $900 billion package right at the end of December was critical because we were facing a number of programs that were set to expire. So there really was this so-called fiscal cliff where you could have seen a number of households being evicted. You could have seen a number of households losing out on their unemployment insurance benefits. And so that plan provided some household financial support as well, right? So the one-time stimulus checks and expanded unemployment insurance. And then finally it provided some support for small businesses, which remain critical through the recovery as well. And as we know, many small businesses continue to suffer, particularly those that are really exposed to say lockdown measures, retailers, restaurants.

Theresa: And so the one-time check is for $600 this round?

Cris deRitis: Yes, $600 this round for individuals earning less than $75,000. And then it gets phased out after that.

Theresa: We've talked a number of times too, about how a lot of folks have been using this, whether it's the one-time check or the additional benefits of the unemployment insurance to pay down a lot of their debt and not necessarily taking out additional. . What kind of impacts does it have potentially to our listeners, predominantly lenders and service providers?

Cris deRitis: I would say it's largely positive for the consumer credit lender. This puts more money in folks’ pockets. It gives them again a little bit of a lifeline here. So households are, by and large, I believe going to pay down some debt and reserve some of the cash that they may be receiving for that rainy day or for that emergency.

Theresa: As we shift gears to the payment protection plan, share with us a little bit more insight there and the additional benefits that have been provided to small businesses.

Cris deRitis: This most recent round provides about $280 billion worth of PPP loans, focusing on micro-businesses or mom and pop businesses. It's really to protect the payroll, as the name implies. This latest round, also, I believe addresses some of the limitations or learnings if you will, from the previous round, in that it's more targeted to really the smallest of the small businesses.

For more on this interview, listen to our full podcast. To access the latest consumer credit and small business insights, contact your Equifax account executive today, or visit us online at equifax.com/business. You might also enjoy checking out Economy.com by Moody’s Analytics for the latest economic updates.

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