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.

Using data from the Census Bureau, we can look at the bottom 20% of the population’s historical incomes since 1967. As shown, there has virtually been no substantive increase in median incomes for that income group since 1980.

(Click on image to enlarge)

Biden Stimulus Poverty, Biden’s Stimulus Will Cut Poverty By 40% – For One Year.

The problem is more apparent when viewed against the other income quintiles.

1 2 3 4
View single page >> |

Disclaimer: Click here to read the full disclaimer. 

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
William K. 3 weeks ago Member's comment

The biggest problem is that while the median income has not increased, the very intentional inflation has reduced the purchasing power of our incomes a whole lot. I realize that the fed tells us that wall street is all of America, but they are wrong. So those are the people that are damaging our country and taking away from the poor. Consider that if the prices were all rolled back to 30 years ago, today's poor folks would not be so bad off. So one of our very real enemies is inflation.

And the main problem with all the money give-away efforts is that they will all run out of "other people's money."

So how can worth-while jobs be created? Probably by not regulating the life out of every small business and not taxing them to death. At least that would be a start.

Johnny Wakeman 3 weeks ago Member's comment

Hey Lance, what you are saying sounds like you are calling the Biden stimulus an entitlement program.

Quote: "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."

I find it interesting that people like to bite famous people's quotes to support their ideologies, because it is taken out of context. I am not familiar in detail with all Keynes' work, other than he is very big in economics, gold and silver, and monetary theory in the 1900s. I just find it interesting that they use him to justify their decisions.

On another note, I agree that giving people money does not necessarily help the problem. Giving everyone money for life means the money has to come from somewhere. It will come from all of us in the form of inflation, because why work if I do not need to? However, technically you are able to prevent inflation if the government forces businesses to not raise prices? In a sense, it feels like communism. While providing basic income forever sounds great, I believe the only way to true prosperity is to actual produce goods and services and become a legitimate contributor to society, not send out handouts for doing nothing. I do believe in helping the less fortunate. While giving money to a homeless person so they have a place to sleep and eat like the Good Samaritan is noble and has its place in my life, I come from the doctrine of teach a man to fish, rather than give a man a fish.

Great post.

Lance Roberts 3 weeks ago Author's comment

You must have skimmed the article for the quotes. Because if you read it...the next sentence after Keynes quote was -

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.

Alpha Stockman 3 weeks ago Member's comment

Exactly right Lance. Good article.