A stimulus check is a payment made to a taxpayer by the U.S. government. Stimulus checks are made by paper check or through direct deposit. They are intended to encourage spending during times of economic and, thus, give the economy a boost. Stimulus checks can be part of a larger federal stimulus package designed to support the economy, which was the case with the stimulus payments that were part of the CARES act in 2020 and the American Rescue Plan in 2023.
Do stimulus programs work to help pull the economy out of a tailspin? In 2011, The Washington Post reviewed a series of studies that looked at the impact the American Recovery and Reinvestment Act (ARRA) of 2009 had on the economy. Out of nine studies, they found that six concluded that "the stimulus had a significant, positive effect on employment and growth, and three find that the effect was either quite small or impossible to detect."2
The Congressional Budget Office found that the stimulus provided by the ARRA created between 1.6 million and 4.6 million jobs by 2011, increased realgross domestic product (GDP) by between 1.1% and 3.1%, and reduced unemployment by between 0.6 percentage points and 1.8 percentage points.3 It's important to note that unlike the Economic Stimulus Act of 2008, the ARRA did not include direct stimulus check payments to Americans.