In These Times - June 9, 2021
To accurately assess the cost of social programs, we should be comparing the required expenditures to the expected savings from poverty reduction. A good example is the recent expansion of the child tax credit — described as a “guaranteed income for families”—which is set to provide up to $300 per child per month for kids under the age of six and $250 per child per month for kids between six and seventeen starting in July. The Congressional Joint Committee on Taxation expects this expansion to cost $110 billion for the year, while the Center on Budget and Policy Priorities projects that the program will decrease child poverty by more than 40%. Well, 40% of $1 trillion is $400 billion, which means the savings from this expansion are over three times the amount spent.
It’s become almost a cliché in the politics of Washington, D.C.: Every time someone proposes expanding a social program or creating a new one, scores of politicians, lobbyists and so-called economic “experts” will pop up to tell you that it will cost too much and we can’t afford it. Somehow, money is never an issue when it comes to tax cuts for the wealthy and corporations or increasing our military budget, but programs that support everyday people are just too damn expensive.
A new analysis from the University of Michigan on the impact of recent stimulus payments adds to a growing body of evidence that shows when it comes to direct cash assistance programs, cost is not a prohibitive issue. In fact, for social programs like these, we may be unable to afford not to do them.
According to the analysis, which looked at data from the Census Bureau Household Pulse Survey, in the weeks following the stimulus check payments in December 2020 and March 2021, households across the country saw a significant decrease in their material hardship. American families reported increased food security, a greater ability to pay for household expenses and less anxiety. This effect was particularly pronounced in low-income households and households with children — in the six weeks following the passage of the December 2020 Covid relief bill, amongst families with children, the rate of not having enough to eat fell by 21% and the rate of having difficulty paying for household expenses fell by 24%. These rates dropped again by 23% and 31%, respectively, following the passage of the American Rescue Plan in March 2021. ...
Read full report at In These Times