Tuesday, February 20, 2018

If you aren't rich you will be fucked


After decades of nibbling and nibbling at the social safety net, the total Republican control of the government has allowed them to finish the job on some of the programs and make viable plans to eliminate the rest. And when the next recession hits there will be nothing left to catch you.
It is hardly premature to ask, in this light, how the Trump administration might manage the fallout from the economic downturn that everybody knows will happen. Unfortunately, the United States could hardly be less prepared.

Not only does the government have precious few tools at its disposal to combat a downturn. By slashing taxes while increasing spending, President Trump and his allies in Congress have further boxed the economy into a corner, reducing the space for emergency government action were it to be needed.

The federal debt burden is now the heaviest it has been in 70 years. And it is expected to get progressively heavier, as the budget deficit swells.

To top it off, a Republican president and a Republican Congress seem set on completing the longstanding Republican project to gut the safety net built by Presidents Franklin D. Roosevelt and Lyndon B. Johnson, which they blame for encouraging sloth, and replace it with a leaner welfare regime that closely ties government benefits to hard work.

As noted in a new set of proposals by leading academics to combat poverty, published Tuesday by the Russell Sage Foundation, anti-poverty policies and related social-welfare benefits over the last quarter-century “have largely shifted from a system of guaranteed income support to a work-based safety net.”

The economists Hilary Hoynes of the University of California, Berkeley, and Marianne Bitler of the University of California, Davis, pointed out in a recent paper that “the safety net for low-income families with children has transformed from one subsidizing out-of-work families into one subsidizing in-work families.”

And yet, as many unemployed Americans discovered the last time recession hit, government benefits that require recipients to hold a job become worthless when there is no work to be had.

Using a broad definition of income and poverty that includes the effects of the complete array of government tools to support low-income families, Professors Hoynes and Bitler concluded that food stamps were critical to stem poverty.

Had food stamps not been available, they estimated, the share of Americans under 65 living below the poverty line would have exceeded 11 percent in 2010, almost 1.5 percentage points more than was the case. The share of Americans in extreme poverty — with less than half the resources of the simply poor — would have exceeded 4 percent, about a third more than it turned out to be. Unemployment insurance had a roughly similar impact on poverty levels.

What is critical to note is that each of the two programs did more to relieve extreme poverty during the depths of the Great Recession than even the earned-income tax credit, the main source of government support for low-income Americans.

Indeed, expenditures per capita from the earned-income tax credit increased only modestly after the recession hit. And spending by Temporary Assistance for Needy Families, the patchwork of state-run programs that emerged from welfare reform in 1996 to replace the poor’s entitlement to federal cash assistance, did not respond to the recession at all.

This is a problem for vulnerable Americans bracing for the next economic shock, because if Mr. Trump and his colleagues in Congress have their way, the only surviving bit of the social safety net when the next recession hits will probably require beneficiaries to work. The earned-income tax credit is likely to survive unscathed. Food stamps are not.
But those core programs are going to be unfuned, eliminated or tied up in insurmountable requirements. If you don't have it, you ain't gonna get it. Please go off into a corner and die quietly.

Comments:

Post a Comment

Subscribe to Post Comments [Atom]





<< Home

This page is powered by Blogger. Isn't yours?

Subscribe to Posts [Atom]