August Update: The Latest Economic Stimulus Update

August Updates on economic stimulus.
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[UPDATE: Congress has still not passed the latest stimulus bill and will not reconvene until November 9th, after the election.]

The latest jobless numbers are better — as compared to the most recent unemployment numbers: 963,000 filed jobless claims. While that’s down from previous weeks, it’s still astronomically high. So, what does that mean for the possibilities of a stimulus bill? Here are the latest economic stimulus updates.

What is The Government Doing?

Both the Senate and House drafted proposals, but they’re far apart and nowhere near reaching agreement. As a result, according to the New York Times, the White House is reaching out to Democrats to try and come to a compromise on the next stimulus package. Treasury Secretary Steven Mnuchin scheduled a meeting with House Majority Leader Nancy Pelosi. According to the times, the two sides appear to remain at an impasse: “Democrats said Mr. Mnuchin would not agree to a package larger than $1 trillion and Mr. Mnuchin accused Democrats of insisting on a $2 trillion threshold for any agreement, according to statements released by both sides.”

When Will We Get Our Next Stimulus Check?

Well, it isn’t guaranteed that we’ll be getting stimulus checks this time around, but chances look very good. That’s one thing on which both the House and Senate agree. But that could be delayed while Congress “negotiates” the rest of the package. Per CNBC: “What I would say to people is there is still a pretty good chance that you’re going to get these payments,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. “But it’s impossible to know when or how long it’s going to take.”

Forbes is reporting that we might be looking to September for the next round of assistance. This is going to be tough on the unemployed who are counting on those weekly unemployment checks. Those have already stopped in August. A September solution means a month without income, without the ability to participate fully in the economy. That could result in businesses reducing their workforce, exacerbating the problem.

Do We Need Another Stimulus Bill?

There’s good news and possibly bad news when it comes to these stimulus packages. The good news is that the last rounds of assistance were successful in closing what Business Insider and Bank of America refer to as the ‘Compensation Gap’ caused by the virus economy. But that comes with a warning. Bank of America says, “the big economic risk from the job losses brought on by the pandemic is whether short-term separations — shallow cuts that can heal — turn into “scarring” long-term unemployment.” In other words, while the initial stimulus bills worked, we’re in desperate need of another one.

According to BoA (see image below), Government help, as a percentage of GDP, is highest now since wartime support, indicating that economic times are troubled and help is needed.

BofA Study Chart

Times Are Uncertain But There’s Help

As we all wait for Congress to pass a stimulus bill, there are things you can do to put yourself and your business on stronger financial footing. If you’re concerned about the future, call our office for a complimentary consultation. We’ll review your business plan and get you into the best position possible going forward.