Poverty in America

 

Poverty in America           Gerry OShea

The wisdom of Oliver Goldsmith’s powerful lines in his moving 18^th century poem The Deserted Village resonates today at a time of flagrant inequality and increasing child poverty in America: “Ill fares the land to hastening ills a prey where wealth accumulates and men decay.”

These words are particularly appropriate while the lame duck Congress is considering restoring the generous Child Tax Credit (CTC) program abandoned at the end of 2021 because of outright opposition by Republicans aided by the cantankerous Democrat, Senator Joe Manchin.

Between July and December 2021, the Internal Revenue Service as part of President Biden’s enhanced Child Tax Credit paid out monthly family subventions of up to $250 per child, aged six to seventeen, and as much as $300 for infants under six, positively impacting 61 million children and over 36 million households.

An important addition to this program centered on the delivery of the family subsidy to a monthly deposit system along the lines of the children’s allowances common in Europe. Also, it included a provision that allowed full payment to mothers who were not earning enough to be liable for income tax – a cohort, previously excluded, that includes more than half of young single mothers.

The biggest impact, on a percentage basis, would accrue to rural mostly Republican-voting states where families tend to be larger and incomes lower. Surprisingly, this constituency is not a priority for Republican representatives, although Marco Rubio and Mitt Romney have shown some appreciation for the needs of poor families.

Mr. Manchin has publicly questioned the wisdom of unconditional cash payments to the poor and he has grumbled that recipients may well spend the money on opioids, which must be seen as a shallow rationalization meant to justify inaction.

 The Census Bureau examined how the extra money was actually spent and found that the great majority of recipients used the payment to buy food, clothing or other necessities, and many saved a portion of it or used it to pay down debt. Other surveys confirmed these results.

Some people worried that such payments would act as a disincentive to work but the evidence did not support this speculation. On the contrary, it released more people – especially women – to take a job because it became easier for them to afford child care.

The defeat in late 2021 of this tried and tested anti- poverty program was a major defeat for progressive politics in the United States. The monthly child poverty rate increased from 12.1% in December - hardly a figure to boast about in a rich Christian country – to 17% just one month later. This 41% increase represents 3.7 million children.

All these statistics are authenticated by the Center on Poverty and Social Policy at Columbia University which since 2020 has established a novel method of measuring monthly poverty rates that allow for changing economic circumstances and for new or altered federal policies.

In the lame duck session of Congress that will end when Republicans control the House early next month, both parties look for cross-party support for particular bills that enhance their ideology and that please their base voters.

Republicans want changes that respond to business interests and this time they are focusing on significant improvements in the taxation system that covers company investments in Research and Development. Democrats want the 2021 Child Tax Credit arrangements restored.

Congresswoman Rosa DeLauro from Connecticut spoke for her colleagues when she pointed out that giving poor people a meaningful break in the new year must surely rate higher in importance than placating big companies. Senator Sherrod Brown from Ohio stated it bluntly: “No corporate tax cuts without restoring the Child Tax Credit.”

A Pew Research Study completed last year showed that most wealthy Americans believe that poor people have it easy because they get government handouts, availing of generous benefits without doing much in return – a perfect example of what logicians call false but convenient thinking.

Let’s enumerate some facts while not blinding the reader with statistics. In the United States, the top 1% own 70% of the wealth with the bottom 90% claiming just 27%. Of course, the richest cohort justify the system by assuring everyone that the door to elite living is open and so the plebs can’t complain.

It seems that capitalism thrives on pointing out that there is a route up for everyone. The American Dream. Sounds good! Except the Federal minimum wage has not moved from $7.25 since July 2009. Where is the commitment to upward mobility there? The American version of capitalism is best summed up in the old adage: Every man for himself and the Devil take the hindmost.

The economy grew by 12% since the financial crisis. This massive buoyancy has created more millionaires and billionaires than in any comparable historical period. The stock market is flying but the top 10% own 80% of the equities, and half of the population of the United States do not have a single share in any company.

A Boston College study reveals that three out of four American workers don’t have an employment-related retirement plan. Close to half the seniors in the United States, the richest country in the world, depend entirely for survival on their monthly social security cheque.

Despite the strong American economy for the last fifty years and burgeoning company profits, workers’ wages have remained stagnant. Brings to mind the statement by the Red Queen in Alice in Wonderland: “In my kingdom you have to run as fast as you can just to remain in the same place.”

The entitlement to wealth derived from inheritance has become very important. Right now, the descendants of rich people are set up for life, thanks to their parents’ or grandparents’ success in the business world. We are talking about the increasing number of idle rich men and women living in luxury off trusts that were created by industrious ancestors now in the grave.

In what way is it good for society that millions of citizens never have to worry about doing a day’s work? Somebody who has passed on has bought them the privilege of never having to engage in the daily character-forming struggles around holding a job! Conservative theorists in the past disparaged the accrual of unearned wealth, but one rarely reads or hears that perspective aired anymore.

From a Christian perspective, serious efforts to ameliorate the curse of poverty, especially among children, must be the top priority. People who have studied the bible, in particular the New Testament, should be first to hear the cry of the poor. That doesn’t seem to be the case in the lame duck session as experts are predicting that the business community will get what they want and the CTC will remain dormant.

Gerry O’Shea blogs at wemustbetalking.com