Expanded Child Tax Policy Slashed Child Poverty(npr.org)
npr.org
Expanded Child Tax Policy Slashed Child Poverty
https://www.npr.org/2022/01/27/1075299510/the-expanded-child-tax-credit-briefly-slashed-child-poverty-heres-what-else-it-d
125 comments
Giving money to households with no strings attached is the polar opposite of "private enterprise just sucking at the teat of free government money". I'm not sure why you think one would follow from the other. Public services have even poorer incentives than subsidized private ones (which again, this is not), they're only acceptable when the private sector alone will absolutely never provide that service under competitive conditions.
I don't think you got what I'm saying. I mean that when you simply give money to people where there may not be efficient markets for some needed good (which you wanted the money spent on), private enterprise often will just exploit the infusion of money to jack up prices and not actually provide more of the service desired.
> private enterprise often will just exploit the infusion of money to jack up prices
When this happens, it's because there are unrelated supply constraints, usually resulting from misguided government intervention. The healthcare sector is a good example in the U.S.
When this happens, it's because there are unrelated supply constraints, usually resulting from misguided government intervention. The healthcare sector is a good example in the U.S.
Yes exactly, or sometimes it is due to regulations written to protect profits creating abnormal market conditions, like for student loans, they are backed by the government and can’t be discharged in bankruptcy and everyone is surprised tuitions have gone up so much?
You can regulate things like higher education. IF you limited the size of loans, or made them government loans you could cap the price. You could also control interest rates with regulation.
Using Australia as an example, I went to a good University and had a government loan for the courses. I am 2 months away from paying it off (humble brag for me). But it was a government loan with no interest. So this is a good example of government offering a service to a point, that the private sector wouldn't ever touch.
If the US government offered a 0% loan for education up to 50K and required payment only after reaching a certain income threshold, that policy would put top down pressure on expensive courses. They'd still exists but the bulk of everyone would be doing a course they could pay off and the competition would change the market.
Likewise, I've recently been thinking about labor productivity with women returning to the workplace. Having kids is bad for families budgets (child care is a killer). Caring for kids keeps women out of the workforce.
I think if public schools offered pre K care from about 18 months to kinder then you'd have parents being able to get back to work and you'd permanently reduce childcare costs. I suspect it'd pay itself off a few times over. Similar to building quality infrastructure.
The problem with that second idea is that it would cost a ton upfront and the payback would be over the medium to longer term, like infrastructure.
People are bad at long term choices and there's the trend of populism in politics at the moment. Which doesn't help anything.
Using Australia as an example, I went to a good University and had a government loan for the courses. I am 2 months away from paying it off (humble brag for me). But it was a government loan with no interest. So this is a good example of government offering a service to a point, that the private sector wouldn't ever touch.
If the US government offered a 0% loan for education up to 50K and required payment only after reaching a certain income threshold, that policy would put top down pressure on expensive courses. They'd still exists but the bulk of everyone would be doing a course they could pay off and the competition would change the market.
Likewise, I've recently been thinking about labor productivity with women returning to the workplace. Having kids is bad for families budgets (child care is a killer). Caring for kids keeps women out of the workforce.
I think if public schools offered pre K care from about 18 months to kinder then you'd have parents being able to get back to work and you'd permanently reduce childcare costs. I suspect it'd pay itself off a few times over. Similar to building quality infrastructure.
The problem with that second idea is that it would cost a ton upfront and the payback would be over the medium to longer term, like infrastructure.
People are bad at long term choices and there's the trend of populism in politics at the moment. Which doesn't help anything.
This is why I believe in universal food stamp cards. Have some regulations attached of course, like nutrition classes, but it takes the place of what some of the money buys, only better.
Child nutrition is probably the single best ROI you can get anyway. Why everyone doesn’t have such a card is beyond me.
Child nutrition is probably the single best ROI you can get anyway. Why everyone doesn’t have such a card is beyond me.
>but I can see that purely dumping money into people's bank accounts is a rough tool to do it.
Why? We do it with social security and that seems like a well liked program. Individuals are generally pretty good at deciding what they need
Why? We do it with social security and that seems like a well liked program. Individuals are generally pretty good at deciding what they need
I commented in reply also above. Giving money to people who are reasonably well equipped to spend it on things that there are mature and reasonably efficient markets for is fine. No one has trouble finding groceries and standard items needed for living with their SS checks.
When you give money to people to spend on say, childcare, and there is not the built up social / labor infrastructure to do it, private enterprise often will just exploit the infusion of money to jack up prices and not actually provide more of the service desired.
Come to think of it, if you go back to the Social Security example, giving people more money because they can't afford housing is not going to magically create housing on its own. It will just produce more expensive housing as people try to outbid each other. We've all seen how that plays out.
When you give money to people to spend on say, childcare, and there is not the built up social / labor infrastructure to do it, private enterprise often will just exploit the infusion of money to jack up prices and not actually provide more of the service desired.
Come to think of it, if you go back to the Social Security example, giving people more money because they can't afford housing is not going to magically create housing on its own. It will just produce more expensive housing as people try to outbid each other. We've all seen how that plays out.
You're worried that nannies will be jacking up prices for their services, and that this will not help develop sufficient "infrastructure"? Doesn't seem all that realistic.
Private equity owned childcare centers. I don't think it's implausible at all.
The increase in prices is potentially a necessary signal for improving infrastructure. I.e. prices drive competition and expended services.
And then the government stopped it and now it will go back up.
Not only that, the administration overpaid ($1500 on a $1000 increase per child 6+, $1800 on a $1600 increase per child 5 and under) so most will see a much smaller refund in the coming months.
To phrase child welfare in terms of a capitalist mindset: if you care about expanding your business and keeping labor costs down, you care about the size and quality of the domestic labor pool, and thus you care about the access to education, the stable living arrangements, and mental welfare of your fellow country people and their families, and thus you support welfare to your poorest country people. To do otherwise, is to not just be heartless, but also foolish.
There's nuance to this, like the effects of immigration and outsourcing, but with a high dollar, you need highly skilled labor to create export goods and for national security, and talent doesn't emerge in a vacuum.
There's nuance to this, like the effects of immigration and outsourcing, but with a high dollar, you need highly skilled labor to create export goods and for national security, and talent doesn't emerge in a vacuum.
Unless your business is extracting something from the ground, like oil, diamonds or gold, without the help of the majority of the population.
From "The Rules for Rulers" by CGP Grey, an adaptation of "The Dictator's Handbook" https://www.youtube.com/watch?v=rStL7niR7gs
From "The Rules for Rulers" by CGP Grey, an adaptation of "The Dictator's Handbook" https://www.youtube.com/watch?v=rStL7niR7gs
Mining and extraction does seem to have a Baumol effect, and it's a problem for those countries to justify expenses like health, education and housing when easy money is being made.
I don't doubt that redistributing income to "poorest country people" helps in "expanding your business and keeping labor costs down" in some amount, but is it a net positive? ie. if the government levies a 10% tax to give to the poor, can you expect your revenue to increase by 10% to offset that?
In an advanced economy you need skilled workers. Skilled work needs a healthy population, enabled and motivated to learn the skills necessary. The US can try to compete on low-skilled manufacturing jobs, but the high dollar gets in the way of that.
Whether there's a net increase in GDP or government revenue, I'm not qualified to even guess, but if I'm running a business and I can benefit from human resources on-site, or need them to have deep cultural knowledge to fulfil my business needs, a local talent pool increases competition, reduces my expenses, and ensures timely and potentially revenue-generating improvements to my enterprise.
Whether there's a net increase in GDP or government revenue, I'm not qualified to even guess, but if I'm running a business and I can benefit from human resources on-site, or need them to have deep cultural knowledge to fulfil my business needs, a local talent pool increases competition, reduces my expenses, and ensures timely and potentially revenue-generating improvements to my enterprise.
If the capitalist mindset you described were accurate, then we would have the kind of society you described because we’ve had a very capitalist economy from the start. But that’s not what we see, so unfortunately what you assert cannot be true.
However, you’re right that we live in capitalism. And it creates child poverty.
However, you’re right that we live in capitalism. And it creates child poverty.
I'm couching a problem in a capitalist frame, I made no assertion that we live in a perfectly capitalist economy. The irony is that China understands the economic value of quality of life better than the US, with the latter making a lot of fuss about the primacy of economy in decision making.
So you're saying that if we did live under perfect capitalism, these problems wouldn't exist. But it's impossible to live under perfect anything, so it seems that instead of trying to become more capitalist, we ought to pick the system that works best while imperfect. Today I handed out survival kits at a homeless encampment. People are cold, tired and hungry. Child poverty, homelessness....this system is not working.
Anyway agreed on China. They've pulled 800 million people out of poverty.
Anyway agreed on China. They've pulled 800 million people out of poverty.
> So you're saying that if we did live under perfect capitalism, these problems wouldn't exist
Nope. But going back to my OP, I think this is a sound rationale for someone of a capitalist mindset to support welfare. It's fair to say that a capitalist society with perfectly rational actors does not exist. Its also quite possible that there are rational counterpoints within the capitalist frame that completely invalidate my argument - but I haven't seen that yet in this thread.
> Today I handed out survival kits at a homeless encampment. People are cold, tired and hungry. Child poverty, homelessness....this system is not working.
I agree.
Disclaimer: I think that unchecked capitalism is wrong, not just because humans are irrational actors, but that it's immoral for humans to serve an economy instead of the economy serving humans. The latter requires broad geopolitical intervention and the global will of people to hold their governments to account. But we always must remember that economies are human constructs, and one that can be changed with enough motivation.
Nope. But going back to my OP, I think this is a sound rationale for someone of a capitalist mindset to support welfare. It's fair to say that a capitalist society with perfectly rational actors does not exist. Its also quite possible that there are rational counterpoints within the capitalist frame that completely invalidate my argument - but I haven't seen that yet in this thread.
> Today I handed out survival kits at a homeless encampment. People are cold, tired and hungry. Child poverty, homelessness....this system is not working.
I agree.
Disclaimer: I think that unchecked capitalism is wrong, not just because humans are irrational actors, but that it's immoral for humans to serve an economy instead of the economy serving humans. The latter requires broad geopolitical intervention and the global will of people to hold their governments to account. But we always must remember that economies are human constructs, and one that can be changed with enough motivation.
China did this by becoming more capitalistic and interacting with the whole world. Many countries like India also eliminated hundreds of millions of cases of poverty, and it didn’t require forced sterilizations or a dictator.
> China understands the economic value of quality of life better than the US
I don’t get what you mean, quality of life can be really low in China (eg no indoor heat in southern China in the winter mean the girls selling snacks at the train station are wearing jackets and gloves while still freezing), but people put up with it.
I don’t get what you mean, quality of life can be really low in China (eg no indoor heat in southern China in the winter mean the girls selling snacks at the train station are wearing jackets and gloves while still freezing), but people put up with it.
I might be naive here, but to my understanding the vast majority have access to housing and quality education in comparison to the US?
Nope, you are being naive. Compulsory education only goes through the 8th grade, so many (40-60%) don’t have a high school education, let alone a quality education (if from the rural area, your school will suck, and the hukou system means you might not be able to get an education at all in the city your family moved to to make money).
China doesn’t technically have homeless people since many of the grifters in their cities have land back home (again, because of the hukou system, your home is hard to change). However, they migrate to cities to try and not starve to death, and might wind up sleeping under an underpass (or somewhere the police can’t find them, to avoid getting beaten). A lot of people who are poor but still have money live in basement rooms (no window, would be illegal in the USA, it’s actually illegal in China as well but rule of law is not a Chinese thing), see https://en.m.wikipedia.org/wiki/Ant_tribe.
Middle class Chinese do well, but they are just a small part of a country with 1.4 billion people. Not everyone lives like they were from Shanghai.
China doesn’t technically have homeless people since many of the grifters in their cities have land back home (again, because of the hukou system, your home is hard to change). However, they migrate to cities to try and not starve to death, and might wind up sleeping under an underpass (or somewhere the police can’t find them, to avoid getting beaten). A lot of people who are poor but still have money live in basement rooms (no window, would be illegal in the USA, it’s actually illegal in China as well but rule of law is not a Chinese thing), see https://en.m.wikipedia.org/wiki/Ant_tribe.
Middle class Chinese do well, but they are just a small part of a country with 1.4 billion people. Not everyone lives like they were from Shanghai.
Fair call. You seem to know more than I do
That [some] child poverty exists in a capitalist society does not mean that capitalism creates child poverty.
You can say the same thing about feudalism and the conditions of those who lived under it.
If we kept the threshold for poverty at the same threshold it was 200 years ago, we'd probably say that capitalism reduces poverty. But as the standard of living moves upward, the threshold for poverty moves up too.
Poverty (in addition to staggering population increase) is a consequence of mercantilism and civilisation, thus recent technological advances in quality life that reduce poverty are bringing those people back to square one. It's hard to say if those technological advances would not have emerged under alternative economies.
Edit: Communist countries did have extensive well-functioning public health care systems (Cuba is an extant example) but that has to be balanced with the central planning in some larger communist states (namely China/Russia) that caused unprecedented famine and misery. Perhaps in an alternate timeline, if communist states weren't living in a world that was economically hostile (sanctions etc.) they might have thrived and focused on quality of life as a technology driver
Edit: Communist countries did have extensive well-functioning public health care systems (Cuba is an extant example) but that has to be balanced with the central planning in some larger communist states (namely China/Russia) that caused unprecedented famine and misery. Perhaps in an alternate timeline, if communist states weren't living in a world that was economically hostile (sanctions etc.) they might have thrived and focused on quality of life as a technology driver
> However, you’re right that we live in capitalism. And it creates child poverty
You don’t have to create child poverty, as child poverty is the natural state of nature.
You don’t have to create child poverty, as child poverty is the natural state of nature.
The 'natural state of nature' is pre-civilisation, where the definition of poverty doesn't really make sense. Everything since the dawn of the civilisation is our own artifice, including the economic systems that we have become subservient to.
I don’t think any sensible capitalist would disagree with this. But the implication that follows, which is “therefor the government should collect more taxes to finance more programs…” is not so obviously a good idea. The government is the least efficient resource allocator ever created. If you ask the government to do something, it will deliver the lowest possible quality outcome, and the highest possible price. Basically your comment basically misses all of the politically controversial aspects of policies like this, in my opinion.
> The government is the least efficient resource allocator ever created.
Why? And are you sure? Are there any statistics on the matter regarding this particular program?
Why? And are you sure? Are there any statistics on the matter regarding this particular program?
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The failures of private schooling in many places I. The world don't bear this out. In many parts of the world, public education is much more effective per dollar spent than private alternatives. Same with health care.
The idea that government is particularly ineffective is not an absolute. We'd do well with dropping it as an assumption and instead question why certain governments fault to produce good outcomes.
The idea that government is particularly ineffective is not an absolute. We'd do well with dropping it as an assumption and instead question why certain governments fault to produce good outcomes.
Why not just give everyone equally? Why just give to the people earning less than $35000.
I know the answer, no need to reply to me. Regardless. Give everyone equally.
I know the answer, no need to reply to me. Regardless. Give everyone equally.
It's a wash. If you "give the money to everyone equally", you'll just be clawing it right back by raising taxes on higher-income folks. Theory suggests that you'll want to phase out the aid quite aggressively as income increases (though not by anything near 100%) because this is where the tightest constraints on spending are no longer binding, so the potential benefit is not that worthwhile.
The result is the same but the details matter.
One is having to prove you are under threshold (documentation, paperwork etc) - the other, everyone gets it, so much less overhead for the poor (the overhead is on the side of the people who can afford it - the VAT tax or whatever is on the other side)
It’s about who has to deal with the paperwork
One is having to prove you are under threshold (documentation, paperwork etc) - the other, everyone gets it, so much less overhead for the poor (the overhead is on the side of the people who can afford it - the VAT tax or whatever is on the other side)
It’s about who has to deal with the paperwork
This is a tax credit, so there ought to be very little paperwork involved other than filing for your taxes - I agree that this kind of arrangement makes sense. It's just that describing it as a subsidy for lower incomes is inherently fairer and more accurate than trying to make it into something "universal".
How outrageous to have to advocate for the public good for children.
I simply cannot reconcile any opposing stance in any way.
The fact that this article even needed to be written says a lot about the state of politics in America.
I don't think I will ever wrap my head around the fact that there are politicians who seem to sincerely believe that the best way to decrease poverty is to give tax cuts to the rich and huge corporations, instead of actions like what's described in the article.
I don't think I will ever wrap my head around the fact that there are politicians who seem to sincerely believe that the best way to decrease poverty is to give tax cuts to the rich and huge corporations, instead of actions like what's described in the article.
I think you are straw-man'ing a bit. Of course giving people money results in them having more money. News at 11.
But it's reasonable to question whether that's a good solution, a band-aid, or perhaps a short-term hack with future blowback, etc.
Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot.
But it's reasonable to question whether that's a good solution, a band-aid, or perhaps a short-term hack with future blowback, etc.
Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot.
The thing is, we have actual data on a lot of these policies. And we know what works and doesn't work.
1 dollar spent on increasing food stamps increases GDP by something like $1.75. For something like an expanded child tax credit, it's more like $1.25. And for tax cuts for top earners, it's around $0.30. Even just looking at it from a purely economic standpoint, one policy is drastically better than the other. But more importantly, the first two policies also have enormous positive and direct benefits - they drastically decrease things like child poverty.
These are some of the most obvious public policy choices for any wealthy country, and for whatever reason we just refuse to take action until there's a massive recession or a global pandemic, and even then it's for like 6 months or a year.
1 dollar spent on increasing food stamps increases GDP by something like $1.75. For something like an expanded child tax credit, it's more like $1.25. And for tax cuts for top earners, it's around $0.30. Even just looking at it from a purely economic standpoint, one policy is drastically better than the other. But more importantly, the first two policies also have enormous positive and direct benefits - they drastically decrease things like child poverty.
These are some of the most obvious public policy choices for any wealthy country, and for whatever reason we just refuse to take action until there's a massive recession or a global pandemic, and even then it's for like 6 months or a year.
> The thing is, we have actual data on a lot of these policies.
I am very skeptical of this - not that we have data, but that the data suggests such a clear and simple relationship that is open to exploitation via policy. There is a long history of people trying to exploit correlations and realizing that the correlation breaks down whenever they try to turn this into a policy lever.
There is also the issue that foodstamps might be beneficial up to a point, but when you flood the system with foodstamps they are no longer beneficial and can be harmful -- there are regimes of effectiveness.
I am very skeptical of this - not that we have data, but that the data suggests such a clear and simple relationship that is open to exploitation via policy. There is a long history of people trying to exploit correlations and realizing that the correlation breaks down whenever they try to turn this into a policy lever.
There is also the issue that foodstamps might be beneficial up to a point, but when you flood the system with foodstamps they are no longer beneficial and can be harmful -- there are regimes of effectiveness.
>The thing is, we have actual data on a lot of these policies. And we know what works and doesn't work.
Can you cite the 'actual data' -- has it held up to broad peer review? Can you provide examples of critique of these policies, and explain why detractors have concerns, and how we could address them?
This isn't global warming (science is clear) -- social policy is inherently messy, with lots of tradeoffs, and is hard to prove empirically. There are lots of reasons why expanding the welfare state might be beneficial for society, but please stop with the moral grandstanding -- it does nothing to further real dialogue.
Can you cite the 'actual data' -- has it held up to broad peer review? Can you provide examples of critique of these policies, and explain why detractors have concerns, and how we could address them?
This isn't global warming (science is clear) -- social policy is inherently messy, with lots of tradeoffs, and is hard to prove empirically. There are lots of reasons why expanding the welfare state might be beneficial for society, but please stop with the moral grandstanding -- it does nothing to further real dialogue.
Actually, we made a real mess of things in other countries by attempting everything except direct cash payments.
There is really interesting history around the food rationing program from the Red Cross that actually just increased human trafficking.
It may turn out that direct cash payments are the most efficient means because then you parallelize the distribution of decisions.
There is really interesting history around the food rationing program from the Red Cross that actually just increased human trafficking.
It may turn out that direct cash payments are the most efficient means because then you parallelize the distribution of decisions.
> We've made a real mess in some third world countries with the cash spigot.
Has there been a comparable scenario of direct cash transfers to poor people?
Has there been a comparable scenario of direct cash transfers to poor people?
GiveDirectly has studied this, and it's absolutely not making a "mess". What makes a mess is foreign aid directed at corrupt, large-scale, government- or NGO-driven "development" schemes. Giving cash just leaves the choice as to how to use the money to those who are best equipped to make it.
I agree with the former (GiveDirectly and other institutions like J-PAL have been huge in putting together randomized trials around aid effectiveness, [1] for a specific example). The latter I think is more up for debate. There are papers showing that aid is still effective in areas with high government corruption. Definitely a pretty debated area though in terms of effectiveness of foreign aid.
[1]. https://www.povertyactionlab.org/case-study/giving-directly-...
[1]. https://www.povertyactionlab.org/case-study/giving-directly-...
The real issue is that the ledger game is a dynamic system. Just because the currency issuer credits certain persons’ accounts in one round doesn’t mean that those accounts won’t sooner or later be depleted in future rounds. The obvious example is how a UBI will assuredly drive up rents as landlords move to capture the additional capacity to pay. Frankly, the day that UBI passes Congress will be the day the rentier class realizes this.
To use Taleb’s terminology, the rentier class have made themselves antifragile. Look how they’ve benefited from political chaos be it financial crises or pandemics.
To use Taleb’s terminology, the rentier class have made themselves antifragile. Look how they’ve benefited from political chaos be it financial crises or pandemics.
This can argument can be made for all essential products/services, what you are arguing seems to be effectively UBI causes additional inflation, which may or may not be true.
Rents are set at the margin. If UBI recipients can move to lower-rent/lower-cost areas while keeping their UBI, there's no reason for rents to rise.
> Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot.
There's a huge difference between giving poor people some money with no strings attached, versus giving governments and ruling classes money with or without expectations, or IMF and World Bank-style economic imperialism.
There's a huge difference between giving poor people some money with no strings attached, versus giving governments and ruling classes money with or without expectations, or IMF and World Bank-style economic imperialism.
They don’t actually believe it though - they get paid either directly or indirectly by the rich they are giving tax breaks to.
Many of politicians are significant asset owners, and asset owners' interests typically align with those whose absurd wealth is derived from asset ownership.
Yes, if you draw a line in the sand as to what does and doesn't count as poverty and then give away a marginal sum of money, suddenly many people cross from nearby one side of that line to nearby the other.
Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made?
Effectively what you've erected is a subsidy for high rent and low wages which target the poor, there must be better solutions than solidifying the systematic problems which capture this segment of the population.
Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made?
Effectively what you've erected is a subsidy for high rent and low wages which target the poor, there must be better solutions than solidifying the systematic problems which capture this segment of the population.
>Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made?
Judging by the article, quite a large difference.
>there must be better solutions than solidifying the systematic problems which capture this segment of the population.
We're talking about poor children here. The systemic problem of this segment of the population is that they are poor. It's easy to talk about poor adults and prescribe behavioral adjustments, it's a way of assigning desert. It's much harder to talk about poor children because it's obvious that no child deserves to be poor.
Judging by the article, quite a large difference.
>there must be better solutions than solidifying the systematic problems which capture this segment of the population.
We're talking about poor children here. The systemic problem of this segment of the population is that they are poor. It's easy to talk about poor adults and prescribe behavioral adjustments, it's a way of assigning desert. It's much harder to talk about poor children because it's obvious that no child deserves to be poor.
> on large scales, how much of a difference have you actually made?
Giving cash to liquidity- and asset-constrained folks with high-value spending needs (like raising a kid) makes a huge difference if you can even roughly target the intervention to them. It's almost impossible to theoretically bound the benefit, it could be very large indeed. Even if some money were wasted on "bad" spending, and even though redistributing it is inherently costly, it's the kind of thing that's absolutely worth trying. It has all the well-known benefits of UBI, except on an even larger scale.
Giving cash to liquidity- and asset-constrained folks with high-value spending needs (like raising a kid) makes a huge difference if you can even roughly target the intervention to them. It's almost impossible to theoretically bound the benefit, it could be very large indeed. Even if some money were wasted on "bad" spending, and even though redistributing it is inherently costly, it's the kind of thing that's absolutely worth trying. It has all the well-known benefits of UBI, except on an even larger scale.
Economics theory as taught in U.S. universities literally says that tax cuts to the rich are overall beneficial, that welfare is bad and unemployment is bad, it actually states that equality is opposite of economic efficiency.
Capitalism is a religion, they believe because they grew up told to believe it. We have found out that the theory is almost entirely made up and rarely reflects reality.
Capitalism is a religion, they believe because they grew up told to believe it. We have found out that the theory is almost entirely made up and rarely reflects reality.
You're over simplifying but yes, many people believe strong and profitable companies and entrepreneurs create a wealthier society that creates benefits for just about everyone. Compare that to communism which does spread wealth more fairly but ends up running the economy into the ground. In the end people move from the "fair" communist countries to the "unfair" capitalist ones.
Talk about over simplifying. We could move a very long ways to the left in economic policy and still be nowhere even remotely approaching communism.
This article looked fishy to me, so I looked into the papers it cited in the food insufficiency section. Turns out that, as always, journalists cannot be trusted to accurately summarize a paper, nor can one expect readers to bother checking it.
1) 25% reduction is a relative number.
> There was a 3.7–percentage point reduction (95% CI, –0.055 to –0.019 percentage points; P < .001) in household food insufficiency for households with children present in the survey wave after the first advance payment of the Child Tax Credit, corresponding to a 25.9% reduction, using an event study specification. Difference-in-differences (−16.4%) and modified Poisson (−20.8%) models also yielded large estimates for reductions in household food insufficiency associated with the first advance payment of the expanded Child Tax Credit.
For ~3 percent to be a 25% relative reduction, the starting value is about 12% households with food insufficiency.
2) What are the patterns of insufficiency rates historically?
> Households with children were most affected—food insufficiency in households with children peaked at 18% in December 2020 and remained at 14% through June 2021, compared with approximately 3% among all households during 2019.
I'd guess the pandemic (esp. lockdowns) did the most harm here. Note that the payments started in July 2021 (per the paper), so the fluctuations in rates of insufficiency in the period before are higher than the estimated CTC-caused reduction.
3) Disparities are because of racism?
> Structural racism has shaped disparities in food insufficiency, with children in Black non-Hispanic (19.2%) and Hispanic (22.0%) households experiencing food insufficiency at almost triple the rate of children in White non-Hispanic households (7.0%) as of June 2021.
Asians? What Asians? We're talking about structural racism here! They don't count because they usually screw up the narrative.
4) What is child food insufficiency?
> The outcome was household food insufficiency, based on the survey item “Getting enough food can also be a problem for some people. In the last 7 days, which of these statements best describes the food eaten in your household?” We coded our outcome as 1 if respondents reported sometimes or often “not [having] enough food to eat” in the last 7 days, and 0 otherwise (“enough of the kinds of food [I/we] wanted to eat,” and “enough, but not always the kinds of food [I/we] wanted to eat”). This coding is the same as others using the Household Pulse Survey data in recent studies during the COVID-19 pandemic.
Thankfully, it's more focused than the catch-all of "food insecurity."
Hypothesis: News and fear over the next pandemic wave causes people to stock up. This causes temporary shortages. Then, when asked if they had been unable to buy what they need, people say "yes."
*Important*: this pertains to the food insufficiency paper --- I didn't look into the child poverty reduction paper.
Regarding the child poverty reduction, I also would be interested in comparisons of child poverty rates and fluctuations re. the CTC. My cynical self views it like this: 1. There is a distribution of income. 2. One threshold in that distribution is called the poverty line. 3. Give people money, and it shifts the mean of the distribution. The integral between the threshold and (threshold - stimulus) on the curve is the people 'lifted out of poverty.'
Seems like a shell game to me. Less so than the EITC, though. It's not that people through the CTC are now able to climb the ladder to job and economic security and achieve the American dream (TM). My sense is that they are still treading water, albeit at a different level, all while the credentialed class congratulates itself over its magnanimity.
If anyone has papers (peer-reviewed papers, not journalists' hot takes), I'd like to read them. Thanks.
1) 25% reduction is a relative number.
> There was a 3.7–percentage point reduction (95% CI, –0.055 to –0.019 percentage points; P < .001) in household food insufficiency for households with children present in the survey wave after the first advance payment of the Child Tax Credit, corresponding to a 25.9% reduction, using an event study specification. Difference-in-differences (−16.4%) and modified Poisson (−20.8%) models also yielded large estimates for reductions in household food insufficiency associated with the first advance payment of the expanded Child Tax Credit.
For ~3 percent to be a 25% relative reduction, the starting value is about 12% households with food insufficiency.
2) What are the patterns of insufficiency rates historically?
> Households with children were most affected—food insufficiency in households with children peaked at 18% in December 2020 and remained at 14% through June 2021, compared with approximately 3% among all households during 2019.
I'd guess the pandemic (esp. lockdowns) did the most harm here. Note that the payments started in July 2021 (per the paper), so the fluctuations in rates of insufficiency in the period before are higher than the estimated CTC-caused reduction.
3) Disparities are because of racism?
> Structural racism has shaped disparities in food insufficiency, with children in Black non-Hispanic (19.2%) and Hispanic (22.0%) households experiencing food insufficiency at almost triple the rate of children in White non-Hispanic households (7.0%) as of June 2021.
Asians? What Asians? We're talking about structural racism here! They don't count because they usually screw up the narrative.
4) What is child food insufficiency?
> The outcome was household food insufficiency, based on the survey item “Getting enough food can also be a problem for some people. In the last 7 days, which of these statements best describes the food eaten in your household?” We coded our outcome as 1 if respondents reported sometimes or often “not [having] enough food to eat” in the last 7 days, and 0 otherwise (“enough of the kinds of food [I/we] wanted to eat,” and “enough, but not always the kinds of food [I/we] wanted to eat”). This coding is the same as others using the Household Pulse Survey data in recent studies during the COVID-19 pandemic.
Thankfully, it's more focused than the catch-all of "food insecurity."
Hypothesis: News and fear over the next pandemic wave causes people to stock up. This causes temporary shortages. Then, when asked if they had been unable to buy what they need, people say "yes."
*Important*: this pertains to the food insufficiency paper --- I didn't look into the child poverty reduction paper.
Regarding the child poverty reduction, I also would be interested in comparisons of child poverty rates and fluctuations re. the CTC. My cynical self views it like this: 1. There is a distribution of income. 2. One threshold in that distribution is called the poverty line. 3. Give people money, and it shifts the mean of the distribution. The integral between the threshold and (threshold - stimulus) on the curve is the people 'lifted out of poverty.'
Seems like a shell game to me. Less so than the EITC, though. It's not that people through the CTC are now able to climb the ladder to job and economic security and achieve the American dream (TM). My sense is that they are still treading water, albeit at a different level, all while the credentialed class congratulates itself over its magnanimity.
If anyone has papers (peer-reviewed papers, not journalists' hot takes), I'd like to read them. Thanks.
Sorry kids, Joe Manchin is concerned about entitlements.
He’s even worse than that:
> Publicly, his biggest gripes are about the cost of the bill. But privately, Manchin has told his colleagues that he essentially doesn’t trust low-income people to spend government money wisely.
> In recent months, Manchin has told several of his fellow Democrats that he thought parents would waste monthly child tax credit payments on drugs instead of providing for their children, according to two sources familiar with the senator’s comments.
https://www.huffpost.com/entry/joe-manchin-build-back-better...
> Publicly, his biggest gripes are about the cost of the bill. But privately, Manchin has told his colleagues that he essentially doesn’t trust low-income people to spend government money wisely.
> In recent months, Manchin has told several of his fellow Democrats that he thought parents would waste monthly child tax credit payments on drugs instead of providing for their children, according to two sources familiar with the senator’s comments.
https://www.huffpost.com/entry/joe-manchin-build-back-better...
So he's assuming all poor people with children are drug users? That's not very nice.
According to “two sources familiar with js2’s” comments, he feels like babies would benefit from regular doses of cocaine.
See how easy it is to make things up about your enemies?
Not shocked the HuffPost publishes it though.
See how easy it is to make things up about your enemies?
Not shocked the HuffPost publishes it though.
Wall Street Journal reports the same thing and it’s entirely consistent with what he says publicly.
> The West Virginia Democrat has raised concerns that the no-strings attached benefit fuels opioid use, according to people familiar with his views. Some other Democrats and outside advocates have argued that the payments help prevent opioid use in hopes of changing his mind on work requirements. West Virginia has the highest rate of opioid-related overdoses in the country, according to government data.
> “Don’t you think, if we’re going to help the children, that the people should make some effort?” he said on CNN earlier this month.
https://archive.is/2021.09.28-163016/https://www.wsj.com/art...
> The West Virginia Democrat has raised concerns that the no-strings attached benefit fuels opioid use, according to people familiar with his views. Some other Democrats and outside advocates have argued that the payments help prevent opioid use in hopes of changing his mind on work requirements. West Virginia has the highest rate of opioid-related overdoses in the country, according to government data.
> “Don’t you think, if we’re going to help the children, that the people should make some effort?” he said on CNN earlier this month.
https://archive.is/2021.09.28-163016/https://www.wsj.com/art...
While this is terrible, let's remember that there are 50 Republican Senators, many who profess the need for the US government to help everyday American families, who also don't support the expanded CTC.
Republicans doubled the child tax credit under Trump with no support from Democrats.
The Democrats would vote for that if it wasn’t part of a massive corporate and high income tax cut. Do you think Republicans would support the Democrats’ CTC measures if it were on its own?
The Republicans aren’t necessarily against spending for these sorts of things but only when they’re in control. Their first principle is to prevent Democratic “wins”, even if it means screwing over children.
The Republicans aren’t necessarily against spending for these sorts of things but only when they’re in control. Their first principle is to prevent Democratic “wins”, even if it means screwing over children.
They also got rid of the child exemption resulting in little change for many Americans.
Democrats also went on to further increase the size of the CTC, as well as the refundability of the CTC, and also made it available as a monthly payment.
Notice that child poverty didn't substantially drop after the Republican change, but did after the Democrats plan.
Democrats also went on to further increase the size of the CTC, as well as the refundability of the CTC, and also made it available as a monthly payment.
Notice that child poverty didn't substantially drop after the Republican change, but did after the Democrats plan.
I wonder how much of an impact the printing of additional money to fund this experiment had on inflation.
The 2008 bank bailout cost 700 billion. Almost all of that money went to rich banks and bankers.
The child tax credit costs ~100 billion a year. The payments cut monthly child poverty by roughly 30%. We have direct evidence that growing up in poverty dramatically reduces your odds of graduating high school, going to college or getting a well paying job later in life. So I would posit that pulling kids out of poverty has a long term net positive effect on the economy. Also its just the right thing to do if we can.
As a comparison, ~$76 billion in PPP loans were fraudulent. ~250 billion of covid relief benefits went to the rich and corporations. https://www.propublica.org/article/the-cares-act-sent-you-a-...
But its the poorest of us that are causing inflation...
The child tax credit costs ~100 billion a year. The payments cut monthly child poverty by roughly 30%. We have direct evidence that growing up in poverty dramatically reduces your odds of graduating high school, going to college or getting a well paying job later in life. So I would posit that pulling kids out of poverty has a long term net positive effect on the economy. Also its just the right thing to do if we can.
As a comparison, ~$76 billion in PPP loans were fraudulent. ~250 billion of covid relief benefits went to the rich and corporations. https://www.propublica.org/article/the-cares-act-sent-you-a-...
But its the poorest of us that are causing inflation...
The $700B in bank bailouts were paid back and the government profited.
Sure, and most of the covid relief money the poors spent went back into the economy.
Right, but OP’s analogy was false.
Was it? Roi may be a longer time frame but willing to bet that if allowed to continue and enough kids are lifted out of poverty; % wise the returns will be greater than what was returned in TARP.
3 million children lifted out poverty but chicken wings are now more expensive. Impossible to say if it was a good policy.
Seriously, how do weigh the consequences of actions like this? On the one hand you have a certainty: many children plunged into deprivation by an unavoidable pandemic. On the other hand you have an almost unknowable risk of influencing worldwide macroeconomic trends. Is the second worth more to you than the first?
Seriously, how do weigh the consequences of actions like this? On the one hand you have a certainty: many children plunged into deprivation by an unavoidable pandemic. On the other hand you have an almost unknowable risk of influencing worldwide macroeconomic trends. Is the second worth more to you than the first?
Sorry if you are being sarcastic, but to respond literally, there is almost no inflation impact from this amount of money. Are we going to ask that for every expense? I imagine some people will - a great way to push small government and against any investment in our country.
> almost unknowable
We know quite a lot about economics, especially inflation and the money supply.
> many children plunged into deprivation
Many children were in deprivation already, and by investing in them we not only help them, we end up with more productive citizens later. Poverty can be devastating.
> almost unknowable
We know quite a lot about economics, especially inflation and the money supply.
> many children plunged into deprivation
Many children were in deprivation already, and by investing in them we not only help them, we end up with more productive citizens later. Poverty can be devastating.
"We know quite a lot about economics, especially inflation and the money supply."
That isn't the case. There's an awful lot of beliefs and curve fitting to them. Hence why QE didn't cause the 2% inflation they believed it would.
That isn't the case. There's an awful lot of beliefs and curve fitting to them. Hence why QE didn't cause the 2% inflation they believed it would.
> That isn't the case.
It is absolutely the case; we just don't know everything. Using modern economics, we have managed inflation and other economic phenomena highly effectively. High inflation (well beyond what is happening now - look at history and at places that ignore economics), depressions, bank runs, etc. are a thing of the past. Look at economic history before the post-war era; look at places that ignore economics and embrace ideology or political priorities instead; there is no comparison.
It's trendy to attack them for their imperfections, but to suggest that economics is powerless is not only ignorant, it's yet another rejection of our human agency, of the power of knowledge, of our ability to determine our destiny, and another baby-and-bathwater attack on our institutions.
It is absolutely the case; we just don't know everything. Using modern economics, we have managed inflation and other economic phenomena highly effectively. High inflation (well beyond what is happening now - look at history and at places that ignore economics), depressions, bank runs, etc. are a thing of the past. Look at economic history before the post-war era; look at places that ignore economics and embrace ideology or political priorities instead; there is no comparison.
It's trendy to attack them for their imperfections, but to suggest that economics is powerless is not only ignorant, it's yet another rejection of our human agency, of the power of knowledge, of our ability to determine our destiny, and another baby-and-bathwater attack on our institutions.
Just the view of someone whose family is from Argentina, and who lived there during two bouts of severe inflation of >50%. To me, it's never "solved" and one thing I really fear is that the US is starting to look more and more like Argentina in both its populist political rhetoric and its abuse of institutions to produce short-term political gains at the expense of longer-term prosperity. You could say that the Roman Republic had inflation solved for several hundred years before it became an empire, and emperors started debasing the currency out of what they viewed, myopically, as political necessity. I think there's a deep irony in the interplay between political trends, monetary policy, and inflation. The more populist the government, left or right, (or in Argentina, Peronist) the more it chases its own economic tail. Inflation is a regressive tax on the poor, because anyone with foreign bank accounts and property can ride it out. Inflation is a funnel that sucks money from the poor to the wealthy. But it's one that's aggravated by populist policies that seemed initially designed to help the poor (or at least to get their votes). On a social level, the cost of the instability it causes is also a bad bet for the rich, because like a tornado it eats everything in its path. No sane rich person wants inflation for their country, even if they would get richer by playing it correctly. It can happen in America, now, because we've crossed a bunch of red lines. We're in an almost unprecedented position as a teetering economic superpower in world history and there is nowhere to go but down. The more politicians pile onto policies that inflate the currency, like the $16/hr minimum wage, the more quickly those small decisions will turn into a spiral.
> Just the view of someone whose family is from Argentina, and who lived there during two bouts of severe inflation of >50%. To me, it's never "solved" and one thing I really fear is that the US is starting to look more and more like Argentina in both its populist political rhetoric and its abuse of institutions to produce short-term political gains at the expense of longer-term prosperity.
That is a consequence of bad decisions, not economics. In fact, economics does every well: It predicts the outcome of the bad decision. And you call it a bad decision because it prioritizes politics over reality, i.e., the economics.
If the doctor says, 'take this pill or you will have a heart attack', and you don't take the pill and have a heart attack, then the problem is you, not the doctor, who actually did very well (unfortunately).
> Inflation is a funnel that sucks money from the poor to the wealthy.
That's a separate question, but that's not really true either afaik:
Argentina's inflation level and the current US inflation level are on entirely different magnitudes; the US has never had hyperinflation (what you describe in Argentina), at least since the advent of modern economics around WWII. US inflation is well under 10% (last I checked), an order of magnitude less than the 50%+ you are discussing. It's like comparing a scraped knee to an severed femoral artery.
Also, the inflation is from entirely different causes. US inflation is due largely to supply chain issues caused by the pandemic.
For poorer people, inflation's effect depends on whether your wages and, if you have savings, whether the interest rate the bank pays on your deposit are inflating at a similar rate. Note that most Americans have no meaningful savings: One recent study said that something like 60% didn't have even $500 saved for an emergency.
Generally, inflation helps those in debt, including poor people, by inflating away the value of their debt. It hurts those who own and lend money - mostly the wealthy. If you have a billion saved and it's
That's why the American reactionaries are so up in arms about it - I agree about the irony, but reactionary policies almost always to favor the wealthy. 'Populists' are about manipulating the populace, not serving them. (They also are making a big deal about it because, 1) they function by creating crises - imagine them not being outraged; 2) it is a way to attack non-reactionaries. Both of those are the reasons for their existence.)
That is a consequence of bad decisions, not economics. In fact, economics does every well: It predicts the outcome of the bad decision. And you call it a bad decision because it prioritizes politics over reality, i.e., the economics.
If the doctor says, 'take this pill or you will have a heart attack', and you don't take the pill and have a heart attack, then the problem is you, not the doctor, who actually did very well (unfortunately).
> Inflation is a funnel that sucks money from the poor to the wealthy.
That's a separate question, but that's not really true either afaik:
Argentina's inflation level and the current US inflation level are on entirely different magnitudes; the US has never had hyperinflation (what you describe in Argentina), at least since the advent of modern economics around WWII. US inflation is well under 10% (last I checked), an order of magnitude less than the 50%+ you are discussing. It's like comparing a scraped knee to an severed femoral artery.
Also, the inflation is from entirely different causes. US inflation is due largely to supply chain issues caused by the pandemic.
For poorer people, inflation's effect depends on whether your wages and, if you have savings, whether the interest rate the bank pays on your deposit are inflating at a similar rate. Note that most Americans have no meaningful savings: One recent study said that something like 60% didn't have even $500 saved for an emergency.
Generally, inflation helps those in debt, including poor people, by inflating away the value of their debt. It hurts those who own and lend money - mostly the wealthy. If you have a billion saved and it's
That's why the American reactionaries are so up in arms about it - I agree about the irony, but reactionary policies almost always to favor the wealthy. 'Populists' are about manipulating the populace, not serving them. (They also are making a big deal about it because, 1) they function by creating crises - imagine them not being outraged; 2) it is a way to attack non-reactionaries. Both of those are the reasons for their existence.)
You seem to be trying to trivialize inflation by implying it is only effecting goods that are not essential, ie: chicken wings. The reality is the inflation has been broad across a lot of essential goods that a family needs. So to the extent that rising costs of food, energy, and housing have driven families on the bubble into poverty it seems like a reasonable thing to discuss.
long term probably a lot less than bombing and occupying other countries so our hegemony can be asserted all over the place... we have 330 million people and spend more than every other country in the world combined on war. A list including china that has 1,440 million people and india which has 1,400 million people.
Seems when the question is war the answer is always yes but when the question is can we help our citizens the answer is how can we pay for it?
The long term compounding benefits of children not being in poverty is a huge win on a society.
Seems when the question is war the answer is always yes but when the question is can we help our citizens the answer is how can we pay for it?
The long term compounding benefits of children not being in poverty is a huge win on a society.
We bombed Nazi Germany during World War II, and then occupied much of it for a while afterwards. Did we do that "so our hegemony can be asserted all over the place"? If so, then I think asserting our hegemony is a good thing. If not, then what definition/test of it are you using that the wars you don't like count, but that one doesn't?
That was almost a century ago. Get over it, US is not a country of warring heroes
Ok but what about after uhh 1945
The criterion for whether a war was asserting hegemony is whether it happened after 1945?
No, the difference between creating and asserting hegemony is meaningful though. Much like how what creates a monopoly is different than what happens after a monopoly is created.
that's a real nice strawman you have erected.
> Did we do that "so our hegemony can be asserted all over the place"?
no.
> If so, then I think asserting our hegemony is a good thing.
well that's wrong.
> If not, then what definition/test of it are you using that the wars you don't like count, but that one doesn't?
I don't like any war; some are needed like stopping hitler and their ghoulish goals sure. name a "war" we have won since then. hell name the last time we actually were at war since congress hasn't gone to war many times.
> Did we do that "so our hegemony can be asserted all over the place"?
no.
> If so, then I think asserting our hegemony is a good thing.
well that's wrong.
> If not, then what definition/test of it are you using that the wars you don't like count, but that one doesn't?
I don't like any war; some are needed like stopping hitler and their ghoulish goals sure. name a "war" we have won since then. hell name the last time we actually were at war since congress hasn't gone to war many times.
>If not, then what definition/test of it are you using that the wars you don't like count, but that one doesn't?
1) Are they committing genocide?
2) Did they attack you?
1) Are they committing genocide?
2) Did they attack you?
So you'd be cool with the US sitting out ww2 if japan didn't bomb pearl harbor?
More or less, yeah. And it did until it happened.
Should Japan have sent troops over in the Mexican-American war of 1846 to stop America's imperial expansion into California and Texas?
Should Japan have sent troops over in the Mexican-American war of 1846 to stop America's imperial expansion into California and Texas?
I think you are ignoring his first test.
"Are they committing genocide?"
Well wasn't clear whether there's a logical AND or OR between the two. In case it's OR, would you say that interventions in china[1], iraq[2], Somalia[3], Kosovo[4], Cambodia[5] would be justified?
[1] https://en.wikipedia.org/wiki/Xinjiang_internment_camps
[2] https://en.wikipedia.org/wiki/Genocide_of_Yazidis_by_the_Isl...
[3] https://en.wikipedia.org/wiki/Isaaq_genocide
[4] https://en.wikipedia.org/wiki/Kosovo_War
[5] https://en.wikipedia.org/wiki/Cambodian_genocide
[1] https://en.wikipedia.org/wiki/Xinjiang_internment_camps
[2] https://en.wikipedia.org/wiki/Genocide_of_Yazidis_by_the_Isl...
[3] https://en.wikipedia.org/wiki/Isaaq_genocide
[4] https://en.wikipedia.org/wiki/Kosovo_War
[5] https://en.wikipedia.org/wiki/Cambodian_genocide
American intervention in other genocides (e.g. Kosovo) led to genocide being kicked into high gear.
Arguably it did in WW2 as well. The Nazis originally planned to dump the Jews in Africa, not kill them. The plans for the Nazis industrial slaughter were approved shortly after the US entered the war and the Nazis were slowly being boxed in.
The fact that Germany reacted to the US entering the war with industrial slaughter doesnt mean that the US was wrong to go to war of course, but it underscores the fact that by default military intervention makes everything worse - especially for the most vulnerable.
Arguably it did in WW2 as well. The Nazis originally planned to dump the Jews in Africa, not kill them. The plans for the Nazis industrial slaughter were approved shortly after the US entered the war and the Nazis were slowly being boxed in.
The fact that Germany reacted to the US entering the war with industrial slaughter doesnt mean that the US was wrong to go to war of course, but it underscores the fact that by default military intervention makes everything worse - especially for the most vulnerable.
This is quite wrong. To the best of our knowledge (it's hard to be sure about this, so there is some genuine controversy still) the industrial slaughter of Jews was meant to double as a convenient 'test run' for Generalplan Ost, viz. the industrial slaughter of practically everyone in the 'East' that the Nazis were then seeking to conquer as their projected 'Lebensraum'. The Nazis were far more evil than anyone would have expected knowing about the Holocaust alone.
"We should let genocides happen, because if we try to make them stop, the people committing them panic and realize they will have to speed up to be able to kill as many people as they want to" is not the gotcha argument you think it is.
If that's what you thought my argument was then my argument isnt the argument you think it is.
From a purely moral standpoint, we should probably go to war with China as we are very much ignoring genocide there right now. Our response was to sanction a few provincial level officials, but we still participated in the Olympics. Pretty pathetic response on our part overall. With that said, from a real world perspective, I'm not signing up to go to war with China as we are looking at an end of the world scenario if that happens. I don't think China is our match militarily but what else do they have in their biolabs and what would they be willing to unleash if they were losing. An estimated 3% (70–85 million people) of the world population at the time was killed in WWII, how many would die in a war between us and China? Short of armed conflict though we should be doing everything in our power to disconnect ourselves economically from them. We should be prioritizing manufacturing in the US.
that's an excellent test.
Given that particular belief has been debunked by ten years of QE, it's not really a consideration is it.
All government spending occurs by 'printing money' because that's how bank clearing works. Balance sheets expand during the day and then shrink back at settlement time - but often not quite as far as they expanded. That's how a growing economy is accommodated.
When money is created, it will always either instantly pay off other loans somewhere or end up entirely in tax, unless somebody along the way doesn't spend it the instant they get it. That's because income, less tax and net loan repayments -> spending -> somebody else's income, less tax and net loan repayments.
To notice "printing money", it has to have been saved not spent somewhere along the spending chain. Therefore the real question we need the answer to is why certain people believe saving causes inflation?
In reality it is the deflationary drag of excess saving that is offset by 'printing money'. They are two sides of the same accounting journal.
All government spending occurs by 'printing money' because that's how bank clearing works. Balance sheets expand during the day and then shrink back at settlement time - but often not quite as far as they expanded. That's how a growing economy is accommodated.
When money is created, it will always either instantly pay off other loans somewhere or end up entirely in tax, unless somebody along the way doesn't spend it the instant they get it. That's because income, less tax and net loan repayments -> spending -> somebody else's income, less tax and net loan repayments.
To notice "printing money", it has to have been saved not spent somewhere along the spending chain. Therefore the real question we need the answer to is why certain people believe saving causes inflation?
In reality it is the deflationary drag of excess saving that is offset by 'printing money'. They are two sides of the same accounting journal.
Probably a lot less impact on the economy than child poverty, especially for those children.
How did you come to the conclusion that the money was printed...?
[deleted]
Some but supply chain is still the real killer. Inflation is global and in fact much worse in some other countries.
This was a pretty small slice of the stimulus.
https://fred.stlouisfed.org/series/M1
https://fred.stlouisfed.org/series/M2SL
Look for vertical - and you'll see it wasn't a small slice.
Look for vertical - and you'll see it wasn't a small slice.
No different than any other federal program.
Revenue neutral versions of CTC policies have been proposed (like Mitt Romney's)
Revenue neutral versions of CTC policies have been proposed (like Mitt Romney's)
Exactly. How many additional children will now be in poverty because inflation put so much out of their reach. It's reverse ends justify the means. Do the means justify the ends?
I agree that funding for children is among the best return on investment [1] (to the point that I think we should rank initiatives and spend on kids first before anyone else gets their turn in line for the same ROI), but I can see that purely dumping money into people's bank accounts is a rough tool to do it.
In fact, our recent history has shown that any kind of allocation of money to some goal mostly leads to the thing being targeted simply getting more expensive (higher education I'm looking at you), given how practiced private equity is at exploiting these things. And the other poster above is correct, of course you're going to see some number of people previously on the edge move into positive territory as soon as you roll out any measure like this.
The question is how efficient and effective can you make the expenditure of tax dollars? And how free market vs. controlling you have to be to do it?
So if some service (child care, health, education) is so important and we want to be efficient about it, doesn't that call for some public entity to provide some basic level of service that people can opt out of and pay more for privately if they want? So that we don't get private enterprise just sucking at the teat of free government money, inflating prices, and at last some guarantee of us getting what we allocated tax money for?
[1] https://www.impact.upenn.edu/early-childhood-toolkit/why-inv... and some other articles I've seen on the topic, will try to find and edit comment