Genuine question from a foreigner in the US: why does the govt give stimulus checks to people with up to $70k salary (and phaseout at some higher level) instead of bigger checks to people who lost their job due to COVID? 70k is higher than median in NY while those most affected are restaurant waitresses, retail workers etc who I assume make far less—and their check amounts are the same? I assume people who still make 70k will continue their pre covid spending, why stimulate that group?

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Stimulus is not just for helping people out, it’s for stimulating the overall economy. Hence the name. People who make under $70K are more likely to spend it, rather than save or invest it.

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Even for the gainfully employed group around $70K that can already afford things, they are still not rich enough to not spend it. It will still influence their spending habits. Maybe they’ll splurge on something nice. Go out more. Buy one extra thing. Etc. This means the stimulus did its job.

The cutoff income is somewhere between the point where a person won’t change their spending behavior, and the point where the cost of it no longer propels the economy. That line is definitely above $70K. It’s likely somewhere closer to $150K, maybe even $200K. It’s impossible to predict, it has to be an educated guess.

Good question.

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