The US Senate recently passed a law that does not include a wage increase to USD 15 an hour. There is a reduction in unemployment benefits from USD 400 to USD 300.
In recent days, the US Senate approved the law to stimulate the economy with a total of USD 1.9 trillion. They sent it back to the House of Representatives for President Biden to approve and enact it.
The government expects this aid to help alleviate the health crisis that the COVID-19 pandemic has caused. This disease has already killed more than half a million Americans until now. The help includes direct checks, unemployment benefits, plus funding to local states and governments.
In addition to direct aid, the law is promoting an anti-poverty program, offering significant benefits to low-income citizens.
Who the Beneficiaries of the Aid Will Be
They are considering giving checks for USD 1,400 to each eligible citizen, in addition to each dependent person. These people are all those whose salaries are below USD 75,000 per year.
Concerning those whose annual income is between USD 75,000 and USD 80,000, that amount will suffer a gradual reduction. Those who earn more than USD 80,000 a year will not receive direct aid.
There will be a reduction in benefits for the unemployed from USD 400 per week, which the previous law contemplated, to USD 300 per week. The new law contemplates a reduction in taxes of USD 3,000 per child by 2021. Eviction for late payment of mortgages will continue, according to the law, until the end of September.
Among the funds that this new aid law contemplates, states and local governments will receive USD 350,000 million. Besides, the government will allocate a total of USD 130,000 million to schools. Some funds will also go to universities, housing agencies, and child care providers.
The Massive Printing of Banknotes and the Price of Bitcoin
This stimulus package is slightly less than the USD 2.2 trillion of the law passed in 2020. However, there could be a printing of money by the US Federal Reserve (Fed) as large as that of last year.
The printing of money implies a risk of inflation in the medium- and long-term. For that reason, the 2020 relief policies were associated with a growing interest in assets perceived as a hedge against inflation. One of those assets, to which a growing number of investors turn, is precisely Bitcoin. The Fed made many announcements related to the package, which proved directly or indirectly favorable to the current bullish cycle of Bitcoin.
A few days ago, after the US Senate passed the law, the price of Bitcoin began to rise gradually. The pioneering cryptocurrency went from USD 47,000 to above USD 50,000 and rallied again in just 24 hours. At the time of writing this article, the price of Bitcoin is around USD 54,500, according to data from CoinGecko.
By Alexander Salazar
