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I’m shocked at how some of you plan to spend your stimulus money

February 25th, 2021 at 2:41 PM
Third stimulus check
  • Some people say they’re planning to use the money from their third stimulus check to invest in stocks.
  • That’s according to a Deutsche Bank survey, ahead of House Democrats being expected to pass President Biden’s $1.9 trillion economic relief legislation on Friday.
  • Some 37% of respondents to the Deutsche Bank survey said they planned to buy stocks with their stimulus money.

When lawmakers and now two US presidents decided that one of the best responses to the coronavirus pandemic’s staggering effect on the US economy would be to mail out and direct-deposit millions of stimulus payments to Americans, this is not really how any of them envisioned the money would be used.

According to strategists at Deutsche Bank AG, a survey of retail investors shows that 37% of them plan to spend their third stimulus check — the release of which is imminent and should come within a few weeks — on buying stocks. Not, in other words, on things like living expenses, food, bills, and other necessities, or even on patronizing local businesses. Which means the US is plunging deeper into debt, in other words, to finance things like more Wall Street activity, in the guise of helping to address COVID’s effect on the economy, no less.

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As we’ve noted on multiple occasions in different posts, an income test is what determines eligibility for receiving the full $1,400 that’s coming in this new round of stimulus checks. Individuals will get the full amount if they have an adjusted gross income below $75,000; for married couples, the AGI has to be below $150,000.

One might be tempted to ask — if a person’s financial situation is such that they’re able to steer some or all of their stimulus check into stocks, does that suggest they were well-off enough to not need another stimulus check in the first place?

At any rate, here’s where things stand in terms of the status of the third stimulus checks themselves. House Democrats are set to finally pass President Biden’s $1.9 trillion economic relief legislation, which includes funding for the stimulus payments, as soon as Friday. That sets things up for a Senate vote, then a combination of the two versions of the bill that each chamber passed, before it goes to Biden’s desk for his signature.

The idea behind the checks is to put money in people’s hands that they’ll spend immediately, quickly juicing the economy by these check recipients shopping at restaurants, buying items in stores, and the like. The Deutsche Bank team, though, estimates that with as much as $465 billion of direct stimulus money about to start flowing, 37% of that being put into equities would be tantamount to a $170 billion infusion into Wall Street.

Who knows, maybe some of that money will go to GameStop to keep that wild story alive — after all, the video game retail chain’s stock price exploded once again this week, climbing more than 100% on Wednesday.

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Andy is a reporter in Memphis who also contributes to outlets like Fast Company and The Guardian. When he’s not writing about technology, he can be found hunched protectively over his burgeoning collection of vinyl, as well as nursing his Whovianism and bingeing on a variety of TV shows you probably don’t like.

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