Biden’s Stimulus Will Cut Poverty By 40% – For One Year.
President Biden’s stimulus bill “will cut the number of children in poverty by 40%,” according to the Center on Budget and Policy Priorities.
“The current Child Tax Credit and EITC together lift more children above the poverty line, 5.5 million, than any other economic support program. This level of poverty reduction was achieved through multiple expansions of the EITC and Child Tax Credit since their respective enactments in 1975 and 1997. The House’s proposal — with one significant change to the Child Tax Credit — would lift another 4.1 million children above the poverty line, cutting the remaining number of children in poverty by more than 40 percent.” – CBPP
The NY Times also jumped on Biden’s stimulus package to tout how “transformative” Biden will be to the U.S. economy. To wit:
“The list of new policies goes on. There is money in the American Rescue Plan to expand food stamps, bolster state welfare programs, and increase federal support for child and dependent care. Put all this together and the bill is expected to reduce overall poverty by more than a third and child poverty by more than half. It is, with no exaggeration, the single most important piece of anti-poverty legislation since Lyndon B. Johnson’s Great Society, itself the signature program of a man who sought to emulate F.D.R.”
Here’s the problem. Unlike the New Deal, which benefitted the economy for decades, the American Rescue Plan will only help the poor for one year. As is always the case with such socialistic policies, they sound great in theory, but they rarely work as expected in reality.
The Poor Do Need Help
“More money in people’s pockets will lead to stronger economic growth.” – J.M. Keynes
I certainly agree with trying to help those in need. Such is why we have charitable organizations that do everything from providing housing, meals, and even job placement. These charities do formidable, challenging, and meaningful work and should have access to funding to do what they do best.
However, the Federal Government is not one of these charities, and throwing money at the problem does more harm than good in the long-term.
Let me explain.