Economy in confusion due to the pandemic and how it is affected
After $2.2 trillion was just spit out of the invisible void for the Economic Impact Payments (EIP), or stimulus payments, many are wondering the exact consequences of this action. Due to debt and unemployment, some believe the economy resides on the edge of crashing.
However, even after Roseburg locals watched businesses disintegrate under the stress of the pandemic, some small, local businesses maintain their grip on the local economy.
Some local businesses, such as Bagel Tree Café on Jackson Street in downtown Roseburg, approached near closure from the pandemic, yet pulled through. “It’s like a roller coaster ride because business became unpredictable,” said Bagel Tree Cafe Manager Leny Dela Cruz.
Dela Cruz mentioned how lucky the business is to survive. She believes due greatly to the unemployment benefits, mixed with some stimulus benefits, her customers are spending more money at her and her husband’s business.
Another local business to see significance changes during the pandemic is NAPA Auto Parts – D&R Auto Truck Supply on Garden Valley Boulevard.
Fortunately for the business, there have been strong sales because they are essential to the county, city, and state road crews. They aid in road services and agricultural development.
Stimulus money and boredom helped some businesses like NAPA. “I think it directly affected the retail walk-ins,” said Daniel Mathers, the NAPA store owner. “A lot of people are doing little projects.”
However, the statistics on stimulus spending, according to Forbes, shows more Americans spent stimulus money on debts and savings. The website concludes that 36% of people are putting that money into savings, while 35% are using that money for debt repayment. The other 29% of money being spent is used on consumption: essential spending at 18%, hobby and other leisure spending at 8%, and donations at 3%.
The stimulus payments give people more confidence to spend, and economic health is largely influenced by consumer spending, according to the Corporate Finance Institute.
Also, according to the Huffpost, keeping money flowing through small businesses especially improves the quality of the economy and community. Local businesses provide competition to larger corporations. They also provide jobs for community members, especially since anyone with a plan can start up a small business. And although businesses often fail, they still provide learning experiences for the community to build and improve on.
Stimulus and unemployment money have come through for the economy–for now.
However, many economists have uncertainties because the government gave out made-up money. Many do not know how this money will be paid back or how it will affect the economy in the long term.
According to the Brookings website, during this time of low interest rates, this borrowed money won’t likely have a tragic impact on the economy in the future. The government is technically “passing the bill onto future generations, but … that bill is probably pretty small.”
The money that people are saving will also enter back into the economy once the pandemic is over. People will have the freedom to travel and more freely enter public businesses, economists are saying.
As of now, locals support small businesses in hopes of maintaining a healthy economy and community. Some locals do not want to see their businesses disappear.
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