Yes, there is such a thing as free money
In March of 2021, Democrats in Congress passed the American Rescue Plan in the wake of the pandemic-induced recession. One of the key components of the law was that every parent would receive $3,000 per child with no strings attached, $3,600 if the child was under six. A recent study from Columbia University found that this policy, if made permanent, would pay for itself more than 10 times over. The study found that “these payments come back in higher long-term earnings, higher educational attainment, higher birth weights, lower neonatal mortality, better adult physical health and better adult mental health. They lead to less crime and higher tax revenues and longer life expectancy.”
When the law was being debated, conservatives argued that this policy would create a disincentive to work, but there has been no evidence to support that idea. In the 9 months that families received the enhanced child tax credit payments, child poverty fell by 25%, and we experienced the fastest rate of job growth in recorded history.
Okay, but what about inflation? Ah, yes. Inflation. The elephant in the room. A real problem that conservatives love to say is created by government overspending. Isn’t the inflation we are currently experiencing related to demand outpacing supply? Demand has been outpacing supply, certainly, but it’s more complicated. We are seeing inflation across the industrialized world in countries with varying economic responses to covid. Price hikes are especially prominent in the energy sector and grains due to the War in Ukraine and related economic sanctions. In the United States, we are experiencing massive inflation in home prices, a form of inflation that is largely caused by artificial supply constraints erected at the municipal level duplicitously to preserve racial and class exclusivity and segregation. But that’s a whole other conversation. My point being that countries that sent out monthly checks are experiencing inflation as well as countries that didn’t send out monthly checks. We cannot allow fear mongering about inflation to kill the most effective anti-poverty program in a generation. Unfortunately, the American Rescue Plan’s funding for the child tax credit dried up last December, and Congress hasn’t had the will to restore it.
While corporate profits are hitting a 70-year high, the labor share of income is at a record low. Addressing this power imbalance is a long-term goal, but in the short-term, we can help families meet their basic needs like childcare, rent, clothing, and food. I would call it a redistributive policy, but we don’t even need to tax the rich to pay for it. As we’ve previously shown, it more than pays for itself. These $250–$300/month payments should be a permanent feature of our economy. Unconditional cash transfers like the enhanced child tax credit are pro-job growth, anti-poverty, and pro-family. We must bring it back.