Firstly, this blog post is not a political debate about whether government should be making payments directly to its citizens. It’s about how the second stimulus check could mean that the proposed $4,000 travel credit died long before it could move.
A few weeks back, we saw many people get excited with the idea of a $4,000 travel credit. The U.S travel association had put out a proposal that would ideally encourage Americans to spend in order to explore their own country. In turn, they’d get credits from the government for those expenses. The idea seemed impractical to many and it doesn’t seem like it’s likely to move ahead in the current public health and economic scenario.
Second Stimulus Check
The last month has turned many travel plans upside down. Case numbers are surging and many countries around the world are seeing a second wave of cases and deaths. Consequently, we’re once again seeing governments react by adding more restrictions.
In the meanwhile, as per the new bill, the HEALS act, similar to the CARES act will provide individuals with $1,200 in payments and couples with $2,400. This new Senate bill is likely going to be the final stimulus check before the 2020 elections in November.
The Pundit’s Mantra
While this still hasn’t passed yet, it’s still a much more pragmatic and useful move compared to the $4,000 travel credit. Here’s why:
- The U.S travel association proposed the idea about the travel credit. If it were to pass, we’d see government simply pick winners and losers by incentivizing the travel industry more than others.
- Amid a global pandemic and recession, discretionary spending is low, disposable income is minimal. During such times, making direct cash payments into people’s accounts makes a lot more sense than issuing travel credits. People are more likely to spend on essential items like groceries, rent and utilities instead of spending on travel, which usually comes out of their disposable income.
- Even if the government were to provide such a credit tomorrow, most Americans simply won’t use it. This is highlighted by polling data which shows how Americans are still skeptical about making travel plans for the future. The data also shows that more than economics, health concerns are shaping how and when Americans want to travel.
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