Americans love rags-to-riches stories, tales of people who transcended childhood poverty to achieve adult success. Unless you’re totally oblivious to reality, however, you surely realize that such stories are the exceptions, not the rule. The disadvantages of growing up in poverty — poor nutrition, poor health care, an impoverished environment, the cognitive burden that goes along with never having enough money — can and often do hobble children for the rest of their lives.
That much is or should be obvious. What you may not know is that economists have actually quantified the damage from childhood poverty.
You see, America’s anti-poverty programs, such as they are — notably food stamps and Medicaid — weren’t rolled out all at once. Food stamps became available in some parts of the country earlier than in other parts; so did Medicaid, which was also expanded in a series of discrete jumps. This stuttering, haphazard approach to helping poor children amounted to an unintentional form of human experimentation: We can compare the life trajectories of Americans who received crucial aid as children with those of their contemporaries or near-contemporaries who didn’t.
And a number of researchers, notably Hilary Hoynes and Diane Whitmore Schanzenbach, have used this evidence to show that childhood poverty has huge adverse effects.
Last week almost 450 economists, led by Hoynes and Schanzenbach, released an open letter to congressional leaders making this point.
“Children growing up in poverty,” the letter declares, “begin life at a disadvantage: on average they attain less education, face greater health challenges, and are more likely to have difficulty obtaining steady, well-paying employment in adulthood.”
In response, the letter calls on Congress to lift millions of children out of poverty by making permanent the 2021 expansion of the Child Tax Credit, which gives most parents $300 a month for every child younger than 6 and $250 a month for each child age 6-17.
This is a really good idea. In fact, it’s such a good idea that those trying to find arguments against it have really been scraping the bottom of the barrel.
Are you concerned about the cost? Right now, with interest rates near record lows, is a time when America should be investing in its future — and lifting children out of poverty is every bit as real an investment as repairing roads and bridges. Indeed, the evidence for a big economic payoff to spending on children is a lot stronger than the evidence for high returns to spending on physical infrastructure (although we should be doing that too).
In fact, the returns to aiding children are so high that the cost would probably be minimal even in narrowly fiscal terms — because helping children grow up into more productive, healthier adults would eventually mean higher tax receipts and lower medical outlays. Unlike tax cuts for the rich, aid to poor children would largely pay for itself.
Are you worried about work incentives? Unlike many anti-poverty programs, which fade out quickly as income rises — and therefore have some negative effect on work effort (although this effect is probably exaggerated) — the Child Tax Credit would still be available to middle-class families. So the disincentive effects would be minimal.
Oh, and the suggestion that the tax credit be tied to a work requirement is a really terrible idea, both morally and practically. The goal here is to help children get a fair chance in life; do we really want to punish them for the sins, if any, of their parents? And adding work requirements would mean placing an onerous paperwork burden on precisely the people least able to deal with it; remember, one of the major costs of poverty is the cognitive burden it places on the poor.
Basically, there are no good arguments against making the expanded Child Tax Credit permanent. Opposition comes down either to a visceral dislike for any government program that helps the poor or to a desire to perpetuate a system that not only keeps the poor poor but also condemns their children to the same fate. And America is supposed to be better than that.
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