MESA, ARIZONA: Just before travelling to Arizona last week, a friend told me the story of his adult son who had moved with his wife and their daughter to the Carolinas. The son had taken a job in a new factory making appliances, mostly for the domestic market. He’s happy with his new situation but less so with the daughter and her boyfriend.
Like most Americans who filed taxes for 2019, the daughter and boyfriend received their second and third stimulus checks by direct deposit or postal delivery. The total for the couple was about $8,000. That’s the $1,400 per person plus $600 per person from the second-round stimulus. That’s $4,000 for the couple plus another $1,400 for their young child. All that combined with unemployment benefits totaled $8,000.
That’s not the end of the story from my construction worker friend. His son’s daughter and boyfriend—with the young child– put the stimulus money in their pockets, got in the car and drove to Mississippi where they have friends. They left their debts behind, my friend’s son holding the bag. The daughter’s credit was bad so dad had co-signed for a car purchase and a new cell phone. Now, says my friend, his son is on the hook for a $4,000 debt.
Here in Mesa, Arizona, next door to Phoenix, I heard another story about stimulus checks. Nicole, a mother of two young children, is the head waitress at a local restaurant. Her husband manages another restaurant owned by the same company.
Nicole’s day begins at 4:30 in the morning when she leaves home to drop off her 18-month-old son at day care. She then drives to the restaurant to begin a ten-hour shift. Her husband leaves home at about the same time.
Nicole’s oldest son is six. Since the first of the year he’s been with grandparents in Alaska because the schools here didn’t re-open until March and Nicole and her husband were insistent that he needed social interaction and instruction. The boy, she says, is doing well in first grade and will return to Arizona in June. The family stays connected via video calls several times a week.
My Arizona acquaintance and her husband are outdoor people. Nicole says they’re dividing their stimulus checks between putting extra money into their Roth individual retirement accounts and saving for hikes and a longer vacation once their son returns from Alaska.
Ben Bernanke, head of the Federal Reserve for two terms until 2014, used to talk about helicopter money as an emergency tool to avert depression. In a real sense, stimulus payments from the government are helicopter money to help people cope with the pandemic and boost economic growth.
Here in the Phoenix area the economy, and particularly housing, is booming and newly re-opened hotels and restaurants can’t find enough workers. Nicole at the restaurant says many people are living off their stimulus money and won’t seek work until its gone.
Back east my friend says much the same thing and predicts that when their stimulus money is gone the granddaughter and boyfriend will return to Carolina and beg dad to take them back. #