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Biden’s $1,400 COVID-19 checks may be great politics, but it’s questionable economics | Opinion

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Most people used the first coronavirus check to pad their savings or pay down debt. (AP Photo/Eric Gay) Robert H. Scott III , Monmouth University and Kenneth Mitchell , Monmouth University

The US$1,400 direct checks to people are the most expensive and perhaps most popular part of the $1.9 trillion coronavirus relief package racing its way through Congress right now.

The House is set to vote on a final version of the package narrowly passed by the Senate on March 6 before it moves on to President Joe Biden’s desk for his signature. Moderate Senate Democrats, who had voiced concerns about how many people would receive direct payments in the original proposal endorsed by the House, managed to make them more targeted at lower-income households, which means an estimated 17 million fewer people will get a check .

The coronavirus package contains a lot of provisions that will help struggling Americans, and we understand why the checks are so popular – with 78% support among adults in a recent survey . No one turns down extra money, after all.

But as economists, we also believe that these direct payments make little economic sense – even with the lower income threshold. And this […]

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