Stimulus Not Stimulating

Larry Summers has discussed and written, most recently at The Washington Post, about too much stimulus possibly overheating the economy. But what if there is no possible stimulating effect at all?

Most adults who reported receiving the second stimulus check used them to pay household expenses including utilities and telecom payments. However, 54% of people between the ages of 25 and 39 reported on the that they mostly used the stimulus money to pay off debt. (Wall Street Journal)

Typically, up to half of stimulus checks on average are spent by people, said Jonathan Parker, a professor at MIT Sloan School of Management who studied the use of economic impact payments in both the 2001 and 2008 recessions. Though it is too early to draw demographic distinctions in the use of the 2021 checks, he said this time around is definitely different.