J.P. Koning, a CoinDesk columnist, worked as an equity researcher at a Canadian brokerage firm and a financial writer at a large Canadian bank. He runs the popular Moneyness blog.
Head over to “r/stimuluscheck”, a subreddit on Reddit, and you’ll learn some sad facts about the U.S. government’s ability to make emergency payments to Americans.
Created in March to share information about coronavirus relief payments, r/stimulus now has over 20,000 members and garners thousands of comments per day. It is full of stories about Americans grappling with misdirected payments and poorly communicated procedures. Many have lost hope of ever getting relief. When they finally get paid, recipients celebrate by posting a screenshot of their notification.
The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, entitles around 80% of Americans to a one-time cash rebate of up to $1,200. That means that 200 million or so of America’s 250 million adults will get some form of relief. The House Committee on Ways and Means estimates 171 million payments will eventually be made (couples may receive one joint payment).
The nature of this crisis means speed is vital. Around 33 million Americans have lost their jobs. Many more are making less income than before. But they still have to pay bills and buy food. That’s what the $1,200 per American is for.
Unfortunately, the timing of the stimulus isn’t equally distributed. Some Americans have already received their $1,200. Millions are still waiting.
What determines whether one gets their stimulus now or later? Two themes help explain variations in speed: wealth and age.
Wealthier Americans tend to file their taxes while poorer ones don’t. Filers have been first in line while many non-filers are still waiting for their $1,200.
As for age, younger people are more comfortable than older ones with direct…