The Best Thing for the Economy, the Right Thing for the Poor

The economy and the nation are at a crossroads. Unemployment, poverty, and hardship are on the rise. For many years, official Washington has said, "It is not the time to deal with poverty," whether in good or bad economic times. The stars have now aligned in the midst of this economic crisis, and it is precisely the time to address the urgent issues of poverty in America.

First, economists across the political spectrum agree that the economy desperately needs to be stimulated by federal investment in things that will generate immediate economic activity and jobs. Second, the same analysts also agree that benefits to low-income families will result in immediate economic stimulation as people in distress will spend the money they receive because they have no other choice. In other words, directly helping vulnerable people works because it will quickly help stimulate the economy, and it's right because it will immediately help poor and vulnerable people. How often do we get to do what works and what's right at the same time?

At the heart of our religious traditions is the command to help the vulnerable and to have a bias for the poorest among us. The compromise the economic stimulus package agreed to in Congress yesterday takes some important steps in directly assisting poor and low-income people and stimulating the economy at the same time. Helping those who have fallen on hard times -- and helping states avert cuts in a range of critical services -- will do more to help the economy and create jobs than poorly targeted tax cuts.

The package includes some significant funding increases for food stamps, increasing and extending unemployment benefits, health insurance for unemployed workers, Medicaid, Head Start, the Child Care Development Block Grant, and fiscal relief for states to assist them in meeting their budget deficits without cutting needed social services. It expands the Earned Income Tax Credit, including marriage penalty relief, and considerably expands the Child Tax Credit. While not all of these were funded at the levels we might have hoped for, taken together they do represent significant assistance to those in need.

The economic forecasts are bleak and if unemployment reaches 9 percent, as many predict, the increases in poverty could be stunning. These provisions in the stimulus package all push against the rising tide of poverty and hardship. Economists have also concluded that they are among the most effective mechanisms for shoring up the flagging economy.

The final stimulus package takes an important step toward doing the best thing for the economy and the right thing for the poor.

Jim Wallis is the author of The Great Awakening, Editor-in-Chief of Sojourners and blogs at www.godspolitics.com.

Click here to get e-mail updates from Jim Wallis

Comments

[Joethepauper]

Just get the greedy corporations to pay the working poor an extra dollar or two per hour, and money will flow into the economy. If they had just indexed wages with inflation, which have stayed stagnant since the 70's, we wouldn't be having this problem. Or tie the minimum wage to congressional pay raises. That way, every time congress votes themselves a pay raise, more money flows into the economy. I'm not an economist, but maybe I'd do a better job as treasury secretary than the idiots who caused this mess.I don't spend much money because I don't make much money. I don't use credit cards and have never made enough to even think about owning a home. I'm very responsible with my money, and would go back to college if I made just a little more. There was a study that concluded that for every dollar raise a business gives it's employees, they would have to raise the average price of an item ten cents. I can deal with paying ten cents more per item if they pay me $40 more per week. They wouldn't even have to raise prices if they could learn to eat less caviar.

[jhNY]

On the assumption my first comment will post, I would like to correct myself, though again from memory: the Swift couplet should read "Triumphant Tories and despondent Whigs/Forget their feud and join to save their wigs."

[jhNY]

Whether or not a plan already exists to address the existential crises of the poor and newly poor, the steady addition to their rolls that the world economy promises for the foreseeable future will soon hit a practical point of crisis: hundreds of thousands of American citizens, perhaps even millions, will be half-hungry and in fear or danger of losing whatever shelter they have as foreclosures mount on rental and privately owned housing and their local economy continues to hemmorhage jobs. The stimulus bill is a first yet inadequate step toward repairing the safety net that more than a quarter century of Reaganesque tough love has torn asunder, but more must be done, so as to prevent social chaos.

Perhaps not long from now, even Republicans will see the necessity for pragmatic action, if for no better reason than for the preservation of their own employment in the halls of Congress. In a lovely poem about a sudden rainstorm in London, Jonathan Swift wrote: "Triumphant Tories and despondent Whigs /act as one and join to save their wigs', (or something like that as I quote from memory). With this in mind, I hope devoutly that self-preservation trumps ideology at last.