As part of President Joe Biden’s American Rescue Plan, millions of families received a significant income boost through Child Tax Credit checks in 2021.
In addition to helping parents stretch their budgets further than they could have otherwise.
These monthly $300 to $350 payments per child landed in bank accounts and mailboxes across the nation, according to Fool.
The tax credit money enabled many recipients to buy food, pay for childcare, and cover other essential bills.
But while this monthly payment was extremely helpful for low to middle-income families. While lawmakers sought to extend the enhanced benefits program for another year, they could not find a way to extend the tax credit expansion.
It doesn’t mean, however, that more financial assistance isn’t needed.
There are a number of reasons why more stimulus money would be helpful to Americans.
Let’s take a look at four reasons why they would need more stimulus money in 2022.
1. Exploding inflation
The U.S. economy has been suffering from rapid inflation since mid-2021, and the problem has only grown worse since then.
A whopping 7% inflation rate was recorded as of mid-January.
Americans are now paying much more for everything than they were a year ago.
The cost of groceries has increased by 6.3% since this time last year.
As inflation continues unabated, there is no sign that it will end anytime soon.
More so, people’s paychecks don’t stretch as far as things cost due to inflation.
It’s a recipe for disaster for households with low or moderate incomes when you factor in the rapidly rising costs of housing.
A stimulus payment would help millions of households combat the rapidly rising costs of consumer goods, at the very least.
It’s important to remember that the last three stimulus checks helped households that needed them, and that was before the rapidly increasing inflation jumped the cost of everything.
2. Increasing Unemployment Claims
For the last few months, unemployment had been low, but recently that has changed. In the week ending Jan. 25, approximately 55,000 new unemployment claims were filed.
That’s a pretty significant increase in unemployment claims. Since omicron cases exploded across the country, the pandemic has had a huge resurgence. This trend will probably continue for a while, leading to higher unemployment rates.
As long as unemployment rates remain high, there will likely be a lot more Americans struggling to pay their bills.
Also, many people will be out of work because of isolation and quarantines, which will further exacerbate the problem.
Additionally, federal unemployment benefits are no longer available at this point, which will make things even tougher for many Americans.
In order to help those most affected by the pandemic, another round of stimulus money would be useful.
3. A Pandemic Ravaging The World
As of last fall, it appeared that the COVID-19 pandemic had finally been contained, at least on paper.
As numbers declined, vaccination rates increased, and restrictions loosened, restrictions began to relax. This helped the economy.
All of that changed when omicron spread around the world. There are still plenty of questions unanswered about how and where this all will end after the rapidly spreading strain of COVID reshapes 2022.
Additionally, there are many unanswered questions regarding what impact this new surge of cases will have on the economy.
Already, we’re seeing empty shelves, shortages of supplies, and other issues that are all very familiar to us. Therefore, many people and businesses could benefit from increased financial relief in the near future.
4. Payments for the Child Tax Credit Have Ceased
A vast majority of families in need received monthly payments from the enhanced Child Tax Credit from July to December 2021.
The enhanced Child Tax Credit lifted millions of children from poverty.
The rate of food insecurity declined dramatically. The extra funds their parents received each month allowed them to continue working.
In spite of the positive effects that the extra income stream had on millions of households, lawmakers allowed those benefits to lapse recently.
Even if they cannot reach an agreement on expanding the Child Tax Credit for 2022, millions of families could benefit from a stimulus payment from the federal government; at least, an average-American-sized fund will do the magic.