$1000 Per Month For EVERYONE | New Stimulus Explained

What's up guys, it's Graham here. So lately, there's definitely been a lot of talking discussion about the upcoming stimulus packages. After all, it's the closest that we can get to receiving free money. Almost 20% of the United States is now out of work, and the markets are reacting exactly the opposite of what people think is gonna happen. Not to mention, it seems as though every few days there's another twist and turn as to what's going on—who's not receiving their stimulus money, who is receiving their stimulus money—and it's turning into quite the overall mess.

But thankfully, there is light at the end of the tunnel because it looks as though there's soon to be passing another round of stimulus, which means more money potentially back directly in your pocket. So in this video, I'm going to be summarizing what's currently on the table, what could come from this, what you could expect, and the timeframe as to when this might happen. Because, like I said, this one will impact you directly and it's all about getting as much money into the people's pockets as possible.

Unless, of course, Shake Shack takes at first—just kidding, that was a joke!

Okay, no, but seriously, here's the information you came here for. And if you enjoy the occasional stimulus update video with all the information that you need in one spot, just make sure to do your part and stimulate that like button until it turns blue. It helps out my channel tremendously if you guys enjoy this content.

So, with that said, let's begin.

To start, these are the previous stimulus packages that have already gone into effect: Phase 1 was enacted on March 6, 2020, to provide $8.3 billion worth of emergency funding towards finding a treatment and developing the necessary tests to properly combat the illness. Phase 2 was enacted shortly after that on March 18, 2020, known as the Families First Response Act, and supplied $100 billion worth of funding towards paid sick leave, testing, food assistance, unemployment benefits, and additional protection towards health care workers.

Now, Phase 3 is where things get really interesting, and most of the videos here on YouTube talking about the stimulus are referring to Phase 3, which had a budget of over $2 trillion. Now, you can't just go and give away $2 trillion and expect things to go smoothly because even now, weeks later, we're still having issues. Although here's where the money was allocated to go: $367 billion went to fund a loan and grant program for small businesses; $130 billion went to hospitals and health care providers; $500 billion was set aside to large corporations; $25 billion was set aside for the airlines; $150 billion went towards state and local governments; and the remainder went to increasing the unemployed benefit by $600 a week and giving every eligible American a one-time check for $1,200.

However, this was not meant to be the last and final stimulus payout. This was for the very beginning, meant to get the ball rolling and then assess the situation to see how bad it is and how much more money needs to be redeployed. And that, of course, brings us to Phase 3.5.

Now, ordinarily you'd think this would just be called Phase 4, but because they ran out of funding of some really popular programs in Phase 3, they're putting this one in there before Phase 4 to refund some programs and expand a little bit more funding on things they should have done previously anyway. Phase 3.5 is going to be costing another $470 billion, with $310 billion of that going to refund the small business loan program, which gives businesses access to funding to retain their employees and keep afloat. Another $60 billion is going to be going towards refunding the economic disaster loan, which also ran out of money, and then another $75 billion for hospitals and $25 billion for testing.

Now, with unemployment still at record highs and businesses still unable to reopen, the Senate is now looking to pass another fourth round of stimulus to get more money back into people's pockets. And this is where things begin getting interesting.

Now, full disclosure here, but all of these are currently just proposals, and I wanted to summarize the details of everything currently in the works for anyone who didn't care about all the minute details of every single bill and instead just want to know in one spot what they have to maybe look forward to.

The first proposal is the one that we're hearing the most about. It's by far the most popular and that would be the $2,000 per month to every eligible American over the age of 16 years old who makes under $130,000 a year. Now, that would be doubled for married couples, meaning if they make under $260,000 a year, they would be receiving $4,000 a month. In qualifying families, with children, would receive an extra $500 a month per child, up to $1,500 a month, and these multi-cash payments would not be counted as income, which means it's tax-free.

And if you have no earnings, or are unemployed or still unemployed, you're still eligible. It would also apply to college students and adults with disabilities who are claimed dependent by somebody else. And the way this is worded is that, if it were to pass, it would be guaranteed for six months, and then at that time, it could go and be renewed for another six months.

Now, keep in mind something like this does not come without a substantial cost to keep it going, and the cost to keep this running is $448 billion per month. So within the first six months, it's gonna be costing $2.6 trillion, which is pretty much as much money as the first three-and-a-half stimulus phases combined. There are also some hurdles and obstacles that have to be overcome by this—like does a sixteen-year-old really need $2,000 a month tax-free?

What if $2,000 a month is more than what the person was already making? Why does someone making $130,000 a year need an extra $2,000 a month if they're still making $130,000 a year? And what if a person is continuing to work as normal and their worker income has not been affected? So I'm sure these are all gonna be the topics for debate whenever this goes to the Senate for discussion.

So I have a feeling if this gets closer to passing, we're likely to have stricter regulation and lower monthly payout amounts, given the cost of this package and the likelihood that they're gonna want to make sure that this money goes towards people who really needed the most. And if I were to guess, I would assume they'll probably end up with some sort of monthly payout amount to qualifying Americans, but they're gonna end up being more strict about who qualifies. There's definitely gonna be more income limitations on this, and they're probably going to want you to either demonstrate or certify that you've been negatively affected before they end up giving you money. But that's just my own assumption, and it's really gonna be up to the Senate to decide what happens.

The second proposal we have is another one that's gathering a lot of mixed opinions here on the internet. Some people absolutely love it, and other people absolutely despise it, and that's what's known as the Rent and Mortgage Cancellation Act of 2020. This is a bill that proposes that renters won't need to pay their rent on their primary residence for one full year. And then, not paying their rent is not going to have a negative impact on your credit history or be treated as an debt. The same also applies to people who own their own home in the sense that they wouldn't need to pay their mortgage for one full year on their primary residence, and not paying their mortgage is not going to impact their credit score or put them at risk of foreclosure.

Now, it's not clear if this is only mortgage interest or if it's interest plus principal or if it's going to extend your mortgage for up to a year afterwards, but that's up for debate. And third, for landlords out there, if your tenants stopped paying you rent, you're going to be reimbursed for that first year. But if you receive money from this fund, you're gonna have to comply with a strict set of regulations, including a five-year rent freeze on the property, which means for those five years, if you accept any money from this, you cannot raise your rent, among by the way a few other stipulations in addition to that. And lastly, lenders would receive a fund as well to make up for all the missed mortgage payments, and from that, they could keep the system running until people begin paying again.

With this proposal, there are also no income requirements or limitations listed, so everybody qualifies. Whether you pay $500 a month in rent or $50,000 a month in rent, you qualify. And surprisingly, this proposal is cheaper than giving every eligible American $2,000 a month tax-free. For example, when I did the math in a previous video, I estimated this would probably cost around $1.3 trillion over the course of a year. But there's so many other downsides and unknowns with this bill that I found it rather unlikely of it actually passing, at least anywhere close to how it's currently written.

For example, the person who benefits the most from this is some really, really rich person who is renting some super expensive mansion somewhere. That person just ends up getting an absolutely free amazing place to stay. On the other hand, this doesn't benefit the person at all who's patiently toiled away to pay off their mortgage and doesn't currently have a payment, or the mom-and-pop landlord who's breaking even on their investments and has to accept the five-year rent freeze in order to get their money back. So just like the first bill, I think it's rather unlikely it passes without a lot of scrutiny.

I do think there can be benefits to implementing something like this, although I have a feeling there have to be some types of limitations or proof that you're actually affected by this and are unable to actually pay your rent or this can work like a Section 8 payment where a portion of that payment is subsidized, and then you have to come up with the rest.

The third proposal we have is another one that I've yet to discuss here on the channel. It is brand new, it's just been proposed, and this is what's being called the Automatic Boost to Communities Act, known as the ABC Act. Now, this one is a really quick read; it's only two pages long, so I'm going to link to it down below in the description for anyone who basically wants to open it up and read along with me. But basically, here's what this proposes: it would immediately provide everyone in the United States with a pre-loaded debit card of $2,000, and then every month after that, it's gonna be automatically reloaded with an extra $1,000 until one year after the crisis ends.

Here's where things get interesting and rather expensive. Every person, including every person, it doesn't matter how old you are, how much money you make, how much money you don't make—if you're a person, you get it. That means a family of four would receive $8,000 up front and then $4,000 a month for one year until after the crisis ends. Again, this applies to everybody, so you don't have to worry if you're in college, your parents claimed you as a dependent—nope, you're still getting your money.

And it also doesn't matter if you're Elon Musk, you're still gonna get the money because this is a pre-loaded debit card. They're gonna make it so that you would be able to go to an ATM and actually take out physical cash in the event you need it, and of course, any fees associated with that are gonna be waived. So essentially, this card is as good as cash.

Now, actually funding this program is quite interesting, and I'm gonna read to you what they say here. No additional debt would be issued; instead, it directs the Treasury to go and mint two $1 trillion platinum coins. The Federal Reserve would then go and purchase those coins and then permanently retain ownership of those coins in order to maintain their balance sheet, and then, of course, the Treasury can go and spend that $2 trillion that they just made by printing $2 trillion coins.

Now, if you're just as confused as I am and can't understand the mental gymnastics it takes to wrap your mind around how this works, here's how this works: it would kind of be like me going and fabricating this $100 one-ounce platinum bullion coin, and then I go to you and say, "Hey, you know what? This is worth $100. Look, it says it's worth $100." So how about this, you give me a $100 bill, and I will in turn give you back this $100 coin.

So that way, you always have $100, you're not losing any money, and now I get your $100 bill. Well, that's kind of what's going on here, except it's a really just fancy way of accounting. See, the way I see it, we can't just circulate more money back into the economy without it coming from somewhere, either in the form of eventually higher taxes or maybe even higher inflation at some point in the future.

So, as confusing as this is worded, it's basically like them going and releasing more money back into circulation without them saying they're releasing more money into circulation. All in all, we'll see if this actually passes, although I have a feeling there's gonna be a lot of pushback in the sense of regulating who gets it, how much they get, for how long they get, and any other stipulations that come along with just giving people money.

And lastly, we have the one that I think is very intriguing, and that is the Get America Back to Work proposal. This would create a refundable payroll tax rebate covering 80% of American workers' payroll cost up to median wages, as well as create a rehiring bonus for employers to take back their employees. Though the details of this plan are hard to come by, and there are several others that are somewhat similar to this, here's how it would work: any time you go and work for an employer, a part of your income is taken out for what's known as Social Security and Medicare tax, and this usually costs about 7.65% of each paycheck.

So, the plan would be to either cut this out entirely, meaning that you're left with 7.65% more money in each paycheck, or the employer would have 80% of their cost subsidized in order to keep you and retain you as an employee. Now, on the surface, this is a really easy one to implement. If you work and get a paycheck, it should automatically be applied, so you're not going to have any confusion. It's also the most direct because you will instantly see the savings.

Except there's a few downsides: one, this requires you to actually be working, so if you're not working or unemployed, this doesn't help you out at all—same if you're already retired; you get nothing. This somewhat defeats the purpose of helping people out who need it the most because this helps people out who already have a job and have income in the first place. The second, if you're actually working, the amount of money that you're gonna be saving is not going to be as much as, let's say, getting $1,000 or $2,000 a month extra.

Even if you're making $75,000 a year, saving that extra 7.65% on each paycheck is only gonna work out to be about $446 a month. So, this is definitely less money than anything else I've listed here. Although if you're self-employed, this amount could be doubled since you're paying both the employer and employee portion of this, meaning you could end up saving 15.3% if you work for yourself.

The third, even though this should incentivize employers to retain their employees and keep them on payroll, it might not be good enough to actually keep their employees on payroll. And number four, this pulls funding away from Social Security and Medicare, which rely on these taxes to stay afloat, and already they're grossly underfunded.

So, even though this is going to be the easiest to administer, it's unclear how much benefit this would actually have as it's currently structured. Even though there's a few other similar proposals currently in the works, these are the ones that I think are worth noting and worth discussing further.

I have a feeling over the next month, we're probably gonna watch these get restructured in such a way where eventually people are gonna be getting the money.

Now, as for a timeline as to when this is going to happen, it's still a bit up in the air, although it appears as though they're working to try to get this out as soon as possible, especially if we end up being shut down for a little bit longer. So I would not get your hopes up about getting $2,000 a month tax-free in the next few weeks, but I do think it might be reasonable to see some sort of a blend of a few of the things that I mentioned here, maybe watered down a little bit more and more regulated, coming over the next 30 to maybe 50 days.

But again, that's just my opinion as some guy on the internet who has absolutely no impact on the outcome of any of this and simply just tries to get everyone just to stimulate. See, I didn't say smash, I said stimulate the like button for the 2000 or than because it helps out my channel. Thank you so much.

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