There's growing buzz in Washington about another round of stimulus checks possibly coming in 2025, and economists are divided on whether it's brilliant or bonkers. The proposal - still in early discussion phases among some Democratic lawmakers - would target lower-income households struggling with persistent inflation.
I've been covering economic policy for years, and I have to say the timing of this discussion is interesting. With inflation still running hotter than the Fed would like (currently at 3.2%), pumping more money into the economy seems counterintuitive to some economists I've spoken with.
But supporters make a compelling case: targeted relief could help those most affected by rising prices without significantly worsening inflation if properly structured. The key word here is "targeted" - this wouldn't be the broad-based payments we saw during the pandemic.
The details remain sketchy, but here's what's being floated: - Payments would likely range from $600-$1,200 per eligible individual - Income thresholds would be lower than previous stimulus programs - The focus would be on families with children and lower-wage workers - Total package size might reach $100 billion (much smaller than pandemic-era stimulus)
This isn't just a domestic issue. A U.S. stimulus package, even a modest one, could affect global markets. Trading partners might see increased demand for their exports, but there could also be concerns about inflationary pressure spreading beyond American borders.
Dr. Lisa Mendoza, a fiscal policy analyst I interviewed last week, believes there's merit to the idea: "A targeted stimulus could help alleviate some of the inflationary pressures by boosting consumer demand and supporting economic recovery." But she emphasized the word "targeted" about five times during our conversation.
The driving forces behind these discussions are pretty clear: despite low unemployment, many Americans are still feeling squeezed. Housing costs remain high, food prices haven't come down much, and wage growth hasn't kept pace with inflation for many workers. Plus (let's be honest), we're heading into an election year in 2026, and politicians are thinking about voter sentiment.
If this does happen, expect a short-term boost to consumer spending, particularly in sectors like retail, restaurants, and travel. But the long-term implications for the national debt and inflation remain concerns that policymakers will need to address.
My take? If they do this, the targeting has to be precise - helping those who truly need it without overheating an economy that's already running warm. It's a delicate balance, and I'm not entirely convinced Washington can pull it off.
