What the COVID Relief Program Means for Michigan’s Economy

It’s a big week for a lot of Americans. While we may not be able to go hunting for a pot of gold on St. Patrick’s Day, many adults will receive a $ 1,400 stimulus voucher.

This is part of the recently passed $ 1.9 trillion COVID-19 relief bill, the third of its kind since the pandemic began just over a year ago. A large sum, more than 10 billion dollars, arrives in Michigan. Here’s a bit of how it breaks down, according to the Detroit News reporter. Melissa Nann Burke:

More than half of the money, $ 5.6 billion, will go directly to the Great Lakes state government. The rest will be distributed across the state between cities and municipalities. Detroit, which has been a leader in vaccine distribution, will receive approximately $ 880 million. Flint is supposed to receive $ 99 million, along with other big cities like Grand Rapids and Lansing receiving large amounts.

While there are some restrictions on the use of money, much of it depends on the leadership of the government. Burke points out that these counties and municipalities’ revenue sources have been hit hard by COVID, but have continued to provide needed services. Some of the money will be used as “filler” to make up for this loss of income, but most of it will still be outstanding.

Charles Ballard, professor of economics at Michigan State University, said he hopes much of the money goes to infrastructure, a controversial issue with huge implications. Governor Gretchen Whitmer focused on this with her mantra “Fix the bloody roads”. Infrastructure work, like repairing roads and water supply systems, employs the types of people who have been hit hardest by the pandemic. These projects would provide jobs for those working in industries like construction, where it is impossible to work from home.

Put in context

While it is difficult to understand the huge sums of money in circulation, you are not alone. Ballard put it in context like this:

“In our daily life, we don’t use a lot of billions of billions. That makes a lot of zeros, ”Ballard said. “Just for context, the US economy generates about $ 21 trillion in production per year. That’s gross domestic product. And Michigan’s economy is about half a trillion. So in those contexts , maybe these numbers won’t seem so huge. ”

It takes a lot of money to run a huge economy like the United States. And it took a global pandemic to cause such a massive stall, requiring $ 1.9 trillion in relief, Ballard said.

And as vaccination efforts intensify and people sigh – hopefully masked – in relief, the fight against the pandemic is still not over. This stimulus bill helps mitigate its impact on the fight on the economic front and aims to focus efforts on protecting and curing COVID-19.

You are probably still wondering about the $ 1,400 relief checks should be sent to approximately 85% of Americans. They’re on their way, depending on taxes and things like that. A lot of people should get them this week. Another direct action comes in the form of child tax credits, where parents of children between the ages of six and 17 receive $ 3,000 per year and $ 3,600 for children under six, Burke said. Ballard says it will be huge for the fight against child poverty.

“It is estimated that this could halve child poverty. If so, this could be one of the few steps we’ve taken in the past 50 years to really fix the problem, ”Ballard said. “In the past, the elderly were the group in the United States most likely to live in poverty. But for decades, they have been children.

Biden’s plans

On March 10, President Biden tweeted that “the help is here” as he signed the massive $ 1.9 trillion COVID relief bill.

While some polls indicate that up to seven in ten Americans support the bill, Biden still intends to sell the bill to the Americans. While this may seem odd, since the bill was already passed late last week, Burke says it’s Biden’s way of avoiding repeat the past.

“I think Biden is going back to the stimulus of 2009 that was passed under President Obama. I have read reports that he thought it was a mistake that Obama did not try to sell this to the public after adopting him, ”said Burke. “He thinks they weren’t given enough credit for this stimulus or for the work they did in 2009 with the previous recession.”

This could be important for retaining Democratic majorities in the House and Senate in the upcoming midterm elections and also for letting Americans know they are gave help in this time of great need.

Ballard stressed the importance of tempering expectations even when touting success.

“One bill will not solve these problems,” says Ballard. “The economy of the United States is twice as big as it was in the 1970s, and yet there are a lot of workers with less take-home pay than they were in 1973, especially those who did not go to college. And so I think if we really wanted to make what I consider to be a more just and equitable society and fight poverty, we have to do a lot more than that.

This article was written by Olive Scott, production assistant in the United States

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