Where does the Stimulus money come from?

Stimulus money does not come from 401K’s, it does not come from taxes, it does not come from social security. “What the Treasury Department does is they create bonds, bills, and T-notes, essentially IOU’s (signed document acknowledging a debt), and then they go and look for buyers.

How does the government pay for stimulus checks?

For the most part, the federal government isn’t taxing people enough to cover the bills — or in this instance, the stimulus checks. Instead, when Congress passes a trillion-dollar bill, the Treasury Department is tasked with borrowing the money.

How does the Treasury Department create money?

They have the power to create money. But, again they aren’t printing anything. Instead, they are typing a number into their computer, and like magic, a digital currency is borrowed by the treasury department. All that borrowing gives the treasury department the ability to issue those stimulus checks.

Is the government using your 401k funds to fund stimulus checks?

Recently a viewer wrote us: My parents who are retired say they are not receiving the funds from their 401K because the government is using their money to fund stimulus checks. No disrespect here, but mom and dad are mistaken. Stimulus money does not come from 401K’s, it does not come from taxes, it does not come from social security.

What happens to the Stimulus money after Congress funds it?

As Bloom points out, the solution to the funding is far simpler than expected. After Congress passes the legislation with the stimulus payments inside, the Department of Treasury takes over to and issue bonds and notes to promise to pay back the money.

How long will it take to pay back the stimulus package?

A: A really long time. Generally, the way governments pay back debt is by raising taxes or cutting spending. Paying back just the $2 trillion stimulus by raising taxes is a possibility. And reversing the 2017 corporate tax cut would do just that, but it would take a decade to pay back the more than $1.5 trillion in cuts made under that law.