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Emergency Savings Fund vs. Emergency Relief Fund: An Economic Model

Booth Id:
MATH014

Category:
Mathematics

Year:
2022

Finalist Names:
Yang, Joyce (School: Bartlesville High School)

Abstract:
A mathematical model was created to explore the possibilities of balancing government financial debt caused by distributing stimulus checks (ERF) through the creation of the Emergency Savings Fund (ESF).​ The US government began issuing COVID-19 stimulus checks in 2020 when many people could not afford to pay for basic necessities. Although they provided a temporary solution to personal financial difficulties, the checks cost the government and taxpayers over $850 billion in direct payments alone and has contributed to unprecedented amounts of inflation. A long-term solution could possibly be the creation of an emergency savings fund. The hypothetical Emergency Savings Fund would be a program that would encourage the US people to have secure savings for unexpected situations by offering tax credit for the total savings up to a certain amount. A mathematical equation was created for the basis of my model and relevant data was gathered for the simulations.​ Multiple variables in the model were individually experimented with to predict a variety of outcomes for a myriad of situations. The study finds that the implementation of the Emergency Savings Fund would produce more savings for the government and taxpayers than pure ERF in most situations.​ This model concept can help guide policy making and deciding on malleable variables that will produce the best outcomes for all parties.​