Stimulus Check 2023: Could More Checks Prevent Predicted Recession in U.S.?

Reports say three batches of stimulus checks have helped the U.S. survive the last economic crisis. In this article, read and find out if more stimulus check 2023 can help prevent the predicted recession in the country.

Reports say that three batches of stimulus checks have helped the U.S. survive the latest economic crisis in the country. However, despite the inflation declining, the bank accounts and budgets of the U.S. are still suffering after almost two years of increases in prices. Unfortunately, several experts have already predicted an impending recession later this 2023 or early next year.

According to an article in Yahoo Finance, the Federal Reserve cannot force banks to loan money at a specific rate. This means that the cost of borrowing would instead be manipulated by adjusting the discount rates for short-term loans. Last March 16, the Federal Reserve enacted the first of the ten consecutive increases to the short-term rates which urged the banks to increase the cost of loans.

Apparently, this was a strategy implemented by former Federal Reserve Chairman Paul Volcker during the inflation in the late 1970s and early 1980s. The strategy was to withdraw money from the economy by making it expensive to borrow. When this happens, the demand will decline and the runaway inflation as well, even if it would cause a recession.

READ ALSO: Up To $1,400 Stimulus Check Will Be Sent To Qualified Taxpayers

Stimulus Check 2023 to Prevent Recession

Nonetheless, an article in GOBankingRates states that the U.S. Congress can allow another batch of the stimulus check 2023 whether the Federal Reserve approves or not. However, it would be difficult to distribute stimulus check 2023 when the Federal Reserve had planned to do the opposite for more than a year now.

CEO of DebtHammer Jake Hill stated that stimulus check 2023 promotes consumer spending and this type of assistance may help trigger inflation. Owner of Canny Trading and a quantitative researcher at GF Securities, June Jia, also stated that the consequences of inflation are more severe than a mild recession. This means that implementing another batch of stimulus check 2023 may be impractical.

READ ALSO: State Governments Provide Stimulus Checks And Tax Refunds To Combat Inflation