Stimulus Destinations

Stimulus Destinations

The article delves into how Americans intend to spend the stimulus funds and how American spending benefits the rest of the world. We also look at who plans to invest the stimulus funds.

Raghavan Mayur
Raghavan Mayur

President Biden's $1.9 trillion stimulus package known as the American Rescue Plan includes $400 billion direct payments to Americans, about 21 percent of the total amount.  Americans who qualify receive $1,400 checks.

In the latest TIPP Poll, we asked respondents how they plan to spend the stimulus payment. Here are the answers:

  • 35% plan to save the money
  • 33% to pay for food/grocery
  • 27% to pay down credit cards or other debt
  • 19% to pay rent/mortgage
  • 17% for home improvement projects
  • 11% use it towards a down payment for a car or a home
  • 9% want to invest in the stock market (stocks, ETFs, bonds, etc.)
  • 7% would like to invest in cryptocurrencies (Bitcoin, Ethereum, etc.)

The two investment categories netted out 13%.  TIPP estimates, approximately $45 billion will go to the stock market.

So, who plans to invest in the stock market or cryptocurrencies? You'll find the answers in the chart below.

According to the National Bureau of Economic Research, Americans spent 40% of the one-time $1,200 payments provided by the CARES Act last spring, while the remainder saved it or used the funds to pay down debt.

US stimulus Will Stimulate Global Economy

President Biden's $1.9 trillion stimulus package would not only provide a significant boost to the U.S. economy, but it would also have a significant impact on the rest of the world. A thriving U.S. economy will ultimately benefit the world as a whole.

The countries that stand to benefit from the stimulus-induced consumer spending the most are China, Mexico, and Canada.

The Organization for Economic Co-operation and Development (OECD) estimates that the stimulus package could increase China's gross domestic product by 0.5% over the next year.

According to Allianz S.E., our spending on computers, household equipment, and clothing will boost China's imports by $60 billion between 2021 and 2022.

Germany will benefit from its exports of machinery & equipment, automotive and pharmaceutical goods.

Three-quarters of the increase in exports will occur in 2021, with the remaining one-quarter occurring in 2022.

By region, the likely benefactors are

  • $97 billion - Western Europe
  • $75 billion - Asia excluding China
  • $60 billion - China
  • $59 billion - Latin America

By country, the probable benefactors are

  • $60 billion - China
  • $45 billion - Mexico
  • $22 billion - Germany
  • $16 billion - United Kingdom
  • $13 billion - Ireland
  • $10 billion - France

As shown in the chart below, our growing trade deficit with China may not be sustainable in the long run.

The United States must increase its exports to China to reduce the trade imbalance.  China must make a concerted effort to open its markets to American exports to achieve this.

Trade between the United States and China is an effective way to keep China's global hegemony and ambition to become the world's leader in check.

President Trump was fearless in his dealings with China and in his attempts to close the trade deficit.

President Biden must now seize the opportunity to increase American exports to China while also improving the human rights situation in the Communist state.


TIPP Takes

Russia Is Not Backing Down From Ukraine

Russian official, Dmitry Kozak, said that Russian forces could intervene to "defend" its citizens in Ukraine.

  • Its citizens being the rebels of Russian descent in the region (a rebellion/civil war that has been ongoing in Ukraine since 2014).
  • Dimitry Kozak said, "Everything depends on the scale of the conflagration."
  • He warned that an escalation could mark the "beginning of the end" for Ukraine - "not a shot in the leg, but in the face."

GERD Talks Fail, The U.S. To Play A Larger Role?

The Grand Ethiopian Renaissance Dam (GERD) project is a massive hydroelectric dam being built in Ethiopia threatening the Nile's flow to/through Egypt.

  • Sudan and Egypt, on one side, want the mediation to expand to include the United States, the United Nations, and the European Union.
  • Ethiopia meanwhile wants the African Union to be the sole mediator.

Akon's Akoin

American-Senegalese Rapper Akon is starting his second futuristic city with the government's blessing in Uganda

  • The first one in his native Senegal was announced in 2018.
  • Both cities would be based on Akon's cryptocurrency Akoin.
  • Akon City Uganda is expected to be ready by 2036.

Biden and Palestine

President Biden's administration plans to provide $235 million of aid to Palestinians, restoring part of the assistance cut by Donald Trump.

  • $75 million in economic and development assistance.
  • $150 million in humanitarian assistance.

German Interests Vary

Germany intends to buy Russian Sputnik V Vaccine, although the Government of Germany claims they have enough.

  • The vaccine will first have to be approved by EMA.
  • A lot is riding on Russia, providing the necessary data for EMA's review.

The Resurrection Of The Troubles

Crowds of mostly young men in a pro-British area of the Northern Irish city of Belfast set a hijacked bus on fire with petrol (gasoline) bombs and attacked police with stones in the latest outbreak of violence that erupted last week.

  • The Youth are reacting to new trade barriers between Northern Ireland and the U.K.
  • The violence started last week in the city of Londonderry before it reached the capital of Belfast over the Easter weekend.
  • Youth may be being spurred on by the older generation.

President Duterte Of The Philippines Needs To Make A Decision On Where His Allegiance Lies

The Philippine defense department said Thursday it was keeping "all our options open" as a diplomatic row with Beijing grows over hundreds of Chinese vessels in the contested South China Sea.

  • "An armed attack against the Philippines' armed forces, public vessels, or aircraft in the Pacific, including in the South China Sea, will trigger our obligations under the US-Philippines Mutual Defense Treaty," said the State Department spokesman Ned Price Wednesday.
  • Beijing claims "historic rights" over most of the South China Sea.

Tippinsights draws on various sources, but our public opinion research generates the majority of our content.  Please contact us if you like the content on tippinsights.com and have a research idea or want to collaborate! The TIPP Poll holds the coveted distinction of being the most accurate poll of the twenty-first century, correctly predicting the winner of the last five U.S. presidential elections.

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