Inflation is a given anytime the government writes a check that creates money for nothing. QED.
If you want more kids in poverty, the best way to get there is to incentive poor people to have more kids they can’t afford to raise. Also a complete no-brainer.
Rbm
2 years ago
Im not for more breaks for having kids. At the same time im for pre k and earlier education. Seems like it would pay off in the long run. Make it 8 to 530 require parents to work and remove tax breaks and give aways currently in place.
PreCambrian
2 years ago
I agree. The poor are there to prevent inflation from getting out of hand.
Taking a more serious note, I have a hard time believing that $2,000 will incentivize someone (let alone all) in deep poverty to stop working which is what I infer from the claim that elimination of deep child poverty will drop from 39% to 0% when behavioral response is taken into account. I also think that inflationary effects should be one of the lowest considerations for a child tax credit, especially for the poor. Inflationary effects don’t seem to be an issue with Fed policy which benefits those with many assets.
On the other hand I don’t particularly like anything which incentivizes having children. Maybe we could have a tax credit for the first two children but one credit is taken away for each child more than two that one has.
Well, I thought the dripping irony in your opening statement was well done! (Seriously!)
After that, I tend to agree with your analysis.
TexasTim65
2 years ago
I don’t believe we can raise anywhere near 22% out of poverty much less 34%. The math doesn’t add up. You can only get out of poverty if you make more income than everyone else that is under the poverty level. Giving them all the same amount of income doesn’t get anyone out.
If the poverty level for families is say 20K and you add +3600 to every family via child credit then the poverty level just moves to 23600. No one is actually raised above the poverty level since everyone essentially got +3600 income.
Agreed. AND…that big giveaway of money for nothing is guaranteed to make inflation worse, and rising prices then raises the poverty level, bringing more who were just above poverty before the new inflation, into poverty since they can no longer afford the same food, clothing, and transportation that they could before.
Tax to cover it? You don’t raise people’s standard of living by lowering someone else’s–not for long anyway.
wmjack50
2 years ago
Have we learned nothing from the Democrat Great Society of LBJ fame(1964) USA population 200 million jail pop 180,000–today Pop. 320million jail pop 2,300,000 a 12s time increase the result of subsidizing the birth of children to be supported by the government. 75% of births in minorities is without marriage. ( 50% in general pop) They get paid more for more children a money making enterprise—these children grow to adults money stops at 18 jail or poverty awaits—In the USA our lawyer pop to general pop is one lawyer for every 300 pop the highest ratio in the world– no wonder most are Democrats–The BBB child credit would be a disaster only to build the dependent voter base of one party
“Have we learned nothing from the Democrat Great Society of LBJ
fame(1964) USA population 200 million jail pop 180,000–today Pop.
320million jail pop 2,300,000 a 12s time increase the result of
subsidizing the birth of children to be supported by the government.”
How many of those 2.3M are in prison because of the war on drugs? Watching COPS or Live PD, a lot of the incidents involved drugs being found, upon a traffic stop. Correct me if i am wrong, but wasn’t the war on drugs, Nixon’s thing?
Not just the subsidy of reproduction. “Give us your tired, your poor, your huddled masses yearning to BREED FREE” hasn’t helped, especially when we again and again reward those who violate our borders to come here illegally.
And don’t forget, the GOP will make it worse. Without abortion, since Roe v. Wade, there might be 62.5 million additional population in the U.S. and many if not most in poverty.
Guess how drug addicts support their addiction—they steal and injure and kill –now if a COP has to use drugs to remove the bastards from the streets causes the thief doesn’t keep his loot in the car so be it
whirlaway
2 years ago
Inflation has been around for a long time. Does anyone think prices started going up only recently? Rents and house prices have been skyrocketing for YEARS. So have higher education costs. And health insurance costs. And medicine costs. And child care costs. And on and on.
Big difference between 2% annual inflation since the 1980’s and 7% now and 10% next year.
Greenmountain
2 years ago
What is interesting is that – the CTC did increase spending. Holiday spending best in 17 years. Turns out low income people do spend v giving tax breaks to the wealthy. They do not spend so freely. And they may not spend it in the US. In this case the CTC is good, but as currently designed agree that it is too broadly defined, giving money to families who clearly do not need it (thus taxing people needlessly). Wish we could come up with a better solution to really help poor children. And unfortunately many of those children Doug78 mentioned probably are not in good day but maybe an overcrowded home day care when parents need to work. How does someone afford day care when when making min wage. And Mich would love to see a deep dive into where all that military spending is going. I am sure a lot of defense contractors had a very Merry Christmas.
Even if means-tested, a lot of Americans would qualify. Some 50 to 60 percent of Americans are literally one paycheck away from poverty and homelessness.
Welcome to Reagan’s shining city on a hill. It took only about 30 years for his dream to come true.
You simply cannot build an economy by printing and giving people money to spend. The effect of increasing the money supply for nothing–that is, you’re not buying anything for the money you spend–can only result in inflation. You add 10% of the money supply, you have just devalued the money. No, it won’t show up the month you gave the money away, or maybe not significantly for a year or two, but your economy does not expand just because you printed money and gave it away. And it builds on itself, because rising prices make more money necessary. How many failed Weimar Republic, Zimbabwe, Moldova and Argentina and dozens of others in the 20th century alone, do we have to see before we learn that basic economic rule? Manufacturing fiat money and giving it away helps no one and always destroys the economy of the nation that did it.
Doug78
2 years ago
The rapport
from the University of Chicago says that it will reduce the number of parents
working by 1.5 million. I guess from an economic, or should I say the measure
of GDP, that is a bad thing. Those 1.5 million parents would not be working but
taking care personally of their children which in my mind a social good and better
than putting them in day care while you work to earn money to pay for day care.
From a GDP point of view a parent not working is bad and lowers GDP and calculations
on the merit of something always seems to hinge on if it increases or decreases
GDP in the short term and often sees longer term non-monetary benefits as irreverent.
For example instead of calling the Child Tax Credit a tax credit and declaring
it a salary for services by parents to the child then it adds to the GDP
calculation and suddenly those 1.5 million missing workers disappear and become
workers even if the real situation has not changed. If we wanted we could do
that for many other aid programs as well. My point being is that using strictly
narrow measures of economic worth like GDP or others to make broad policy
decisions often will lead to pernicious outcomes and to not discuss these
implications by drowning them in a colossal bill is borderline legislative criminality.
But big assumption that these people will be actually be taking care of their children. Yes I am sure there would be many but I bet we would be surprised on how many that don’t change their behavior.
Felix_Mish
2 years ago
With regard to the UofC simulation, what is its predictive track record?
Current proposal: With zero income, do we get the cash from the government, or does this credit only cut taxes paid otherwise?
In any case, the inflation effects of any money that passes through or is printed by the government is probably the same, whether it’s spent on a road, a missile, or a kid.
Quick opinion: A child tax credit against taxes otherwise paid could happily replace many USG spending items. But then, I’m no Malthusian.
There is a huge difference in money spent to buy a bridge, a road, an airport, or even a missile…and just giving away money for nothing. Print it and hand it out, and it’s pure devaluation of your currency.
I’m not sure of that. Sure, you buy a bridge, you get a bridge. But if you hand people money, they’ll buy something with it. The question is which is the better purchase.
honestcreditguy
2 years ago
the real perverse thought is a struggling hard working taxpayer would be paying for someone else’s kids who is lazy and popping out kids for mo money, not his or her own…..
So much this. Then combine that with the free babysitting part of BBB (disguised as paid pre-K daycare) and you wonder exactly what parent’s are paying for when they have kids if they are getting free babysitting, a big child care credit, lots of SNAP and housing benefits etc.
Essentially they aren’t doing anything for their kids beyond birthing them. There was a time not so long ago (1 generation or so) when you didn’t have kids if you couldn’t afford to provide for them. We need to return to that.
I don’t think there was such a time. I remember in the 70s the poor white trash units of my extended family had 4 or more kids. None of the successful families had more than 2.
Zardoz, you can extrapolate that to the nation. I’ve noticed for the last 50 years, with few exceptions, families were likely to have lots of money OR lots of kids, but not both. It’s no different now.
fame(1964) USA population 200 million jail pop 180,000–today Pop.
320million jail pop 2,300,000 a 12s time increase the result of
subsidizing the birth of children to be supported by the government.”
…suspiciously, correlated with trillion dollar government handouts over the same period.
Welcome to Reagan’s shining city on a hill. It took only about 30 years for his dream to come true.
The rapport
from the University of Chicago says that it will reduce the number of parents
working by 1.5 million. I guess from an economic, or should I say the measure
of GDP, that is a bad thing. Those 1.5 million parents would not be working but
taking care personally of their children which in my mind a social good and better
than putting them in day care while you work to earn money to pay for day care.
From a GDP point of view a parent not working is bad and lowers GDP and calculations
on the merit of something always seems to hinge on if it increases or decreases
GDP in the short term and often sees longer term non-monetary benefits as irreverent.
For example instead of calling the Child Tax Credit a tax credit and declaring
it a salary for services by parents to the child then it adds to the GDP
calculation and suddenly those 1.5 million missing workers disappear and become
workers even if the real situation has not changed. If we wanted we could do
that for many other aid programs as well. My point being is that using strictly
narrow measures of economic worth like GDP or others to make broad policy
decisions often will lead to pernicious outcomes and to not discuss these
implications by drowning them in a colossal bill is borderline legislative criminality.
link to fortune.com