The American Rescue Plan Act of 2021, signed into law by President Joseph Biden on March 11, was a $1.9 trillion economic stimulus bill meant to kickstart the economy amid the recovery from the coronavirus pandemic.
In addition to a variety of measures that include coronavirus relief and an expansion of the child tax credit, the Rescue Plan mandated $1,400 in direct payments to individuals.
The question is, how are people spending their money?
Doxo, a bill paying service, released a study this week to indicate how Americans are spending their stimulus checks. And the first thing most people did, according to the study, is pay household bills. Doxo, to be clear, is a bill paying service and not a scientific polling outfit.
“From March 17th to March 21st, we saw a 30% increase in the number of payments as compared to the same period last month,” Doxo said. “During that time frame, the total amount of payments made were 37% higher as compared to the same period last month.”
Doxo went on to estimate that about 62 percent of the money being spent from the stimulus checks is going towards household bills. Another major thing the stimulus money is going to is paying down debt.
“Doxo’s data also reveals that consumers are using the stimulus money to pay down debt/money they owe, in what appears to be big chunks. The fact that the average payment amount increased even greater than the volume is an indication that many people were catching up on missed or reduced prior payments,” the company said.
Credit card payments have increased 29 percent, utility payments are up 23 percent, and cable/Internet payments have gone up 20 percent.
According to Fortune, which wrote up the Doxo survey, the numbers largely match those of the U.S. Census Bureau’s Household Pulse Survey, which found last month that more people planned to spend their stimulus money on food and utilities.
“A study of 110 million people who reported receiving stimulus checks, taken between Feb. 17 and March 1, showed debt reduction and household expenses as the top priorities,” Fortune said.
In a semi-viral headline from the New York Post that recently made the rounds, it was stated that “stimulus checks are being spent on…tigers, guns and stripper poles.” But the headline is old — it’s from April 2020, and references the first round of stimulus checks, from the CARES Act — and was sourced entirely from random tweets. After all, if everyone in the country is getting stimulus checks, that money is going to be spent on unusual things. And whether it’s being spent on household bills, guns, or stripper poles, stimulus is stimulus, and the money is entering the economy as intended.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.