When I choose a topic for a post, I try to relate it to some direct personal experience. Then I can tell a story, and stories are always more evocative than facts or statistics. This post, however, deals with the unfolding financial stresses brought on by the end of many Covid-era assistance programs along with a confluence of other economic factors.
In what borders on tragic irony, the very inflation of which you write was in large part brought on by the increased government funding that was triggered by the covid pandemic. From mid-2019 until just a few months ago, Trillions of dollars were pumped into the economy. We could debate whether this was good or bad policy, but the reality is that the large input of cash, including the CTC expansion singled out above, caused people to make economic decisions that could not be sustained if the program was terminated -- or rather, WHEN the program was terminated.
In hindsight, policy decisions that looked necessary and even generous, have proven ultimately to be destructive. The families who will now be forced out of rental property, and thus face enormous hardship, made decisions when money was more available than it soon will be, and when rents had not yet responded to the increased money supply, or were frozen.
I know, "if the government had not overprimed the economy" is a counterfactual statement, but people with even a basic level of economic understanding will recognize that consumers make different decisions when government intervenes by doing things like freezing rents or pumping money into the economy.
It is, as I said at the beginning, a sad irony that government trying to make things better ends up making things worse. But we are seeing that now. Perpetuating programs like CTC only distorts the market and leads consumers to make poor decisions.
I’m sorry David, this one really bothers me. We had a lot of assistance programs before Covid, and if they weren’t working because of lack of money, then that’s another problem. I don’t know if the best way to handle this is at the state or community level, but it sure isn’t the federal government.
I agree with Flier. Way too much money was thrown into the economy. I still see businesses having trouble finding workers. A lot of restaurants have stopped serving lunch, and have even cut back on the evenings they’re open. We are seeing a lot of people standing at street lights with signs, but there are still a lot of places that need employees. Some of these people look mentally ill, possibly, but the majority are young, physically fit, smoke cigarettes, have cellphones, and are dressed quite well. What’s that about?
I don’t know what to say about people who can’t pay their rent, but telling the home and apartment owners that they aren’t going to get paid is not a solution either.
Sorry, my thoughts aren’t all that cohesive, and I don’t have any overall strong arguments one way or the other. However, I know a mess when I see one, and this one is big.
I had to stop at the second paragraph to offer a comment. The continuing and expanding use of "privileged" is, in and of itself, a problem -- at least to me. It is divisive and will surely create a backlash, if it has not already done so. It is, of course, imprecise and in that imprecision lies a major problem, but the greater problem is that many who the warriors call privileged resent the word because they have reached their economic status through a great deal of hard work. Were they born into circumstances that started them off on a better path. Some. Many. However, it is being used as a guilt lever. If you want allies, beating them with a guilt lever is, I think, likely to turn them away from you and possibly against you. Enough.
As to the use of privileged in writings about poverty, I think we must find another term. If not, we, too, are wielding the lever, however well-intentioned our writing may be. English has a lot of words. (Oxford lists 600,000). Surely we can find a better way to have this discussion, especially as it is intended to serve a good purpose.
Sorry for the interruption. Now back to our regular programming.
I appreciated the "story" here to question my biased views. What I did not hear is how the native born US citizen is impacted? Or did I miss that. It started with those in the shadows. And what about my friend who is 62, body worn out from a life of manual labor, losing his food assistance benefits? He took is choosing between rent and food. Who is worried about helping him in the community? Or are we worried about the illegals who are in the shadows, or the people of Ukraine where another chunk of money was found to have been sent off somehow stuffed in a small pocket unannounced to us (I read this a day or so ago...money found to have been sent unknowingly?). I have compassion and I am fed up with the federal and state government putting illegal aliens ahead of US born people who are struggling. I agree none of these people out money away. How could they? They were on the razor's edge pre pandemic. I think that would be Polly Anna thinking to assume people would have saved money. Plus our dollar buys so much less that even if you saved, you're not going to make it easily through skyrocketing food gas, living prices. It's ludicrous and overwhelming. I don't know the answer. But I would like to stop paying for Ukraine (and other senseless money policies that we have no need to be paying for) and tighten our borders. Our Americans need our help, do they not?
Excellent compilation of issues creating a "cliff." Certainly affects many. Add the ongoing repricing of assets and debt which affects most. Not to mention an economic recession (if/when it finally happens) which will impact everyone. Fed must walk a tightrope to avoid a lot of economic pain.
In what borders on tragic irony, the very inflation of which you write was in large part brought on by the increased government funding that was triggered by the covid pandemic. From mid-2019 until just a few months ago, Trillions of dollars were pumped into the economy. We could debate whether this was good or bad policy, but the reality is that the large input of cash, including the CTC expansion singled out above, caused people to make economic decisions that could not be sustained if the program was terminated -- or rather, WHEN the program was terminated.
In hindsight, policy decisions that looked necessary and even generous, have proven ultimately to be destructive. The families who will now be forced out of rental property, and thus face enormous hardship, made decisions when money was more available than it soon will be, and when rents had not yet responded to the increased money supply, or were frozen.
I know, "if the government had not overprimed the economy" is a counterfactual statement, but people with even a basic level of economic understanding will recognize that consumers make different decisions when government intervenes by doing things like freezing rents or pumping money into the economy.
It is, as I said at the beginning, a sad irony that government trying to make things better ends up making things worse. But we are seeing that now. Perpetuating programs like CTC only distorts the market and leads consumers to make poor decisions.
I’m sorry David, this one really bothers me. We had a lot of assistance programs before Covid, and if they weren’t working because of lack of money, then that’s another problem. I don’t know if the best way to handle this is at the state or community level, but it sure isn’t the federal government.
I agree with Flier. Way too much money was thrown into the economy. I still see businesses having trouble finding workers. A lot of restaurants have stopped serving lunch, and have even cut back on the evenings they’re open. We are seeing a lot of people standing at street lights with signs, but there are still a lot of places that need employees. Some of these people look mentally ill, possibly, but the majority are young, physically fit, smoke cigarettes, have cellphones, and are dressed quite well. What’s that about?
I don’t know what to say about people who can’t pay their rent, but telling the home and apartment owners that they aren’t going to get paid is not a solution either.
Sorry, my thoughts aren’t all that cohesive, and I don’t have any overall strong arguments one way or the other. However, I know a mess when I see one, and this one is big.
I had to stop at the second paragraph to offer a comment. The continuing and expanding use of "privileged" is, in and of itself, a problem -- at least to me. It is divisive and will surely create a backlash, if it has not already done so. It is, of course, imprecise and in that imprecision lies a major problem, but the greater problem is that many who the warriors call privileged resent the word because they have reached their economic status through a great deal of hard work. Were they born into circumstances that started them off on a better path. Some. Many. However, it is being used as a guilt lever. If you want allies, beating them with a guilt lever is, I think, likely to turn them away from you and possibly against you. Enough.
As to the use of privileged in writings about poverty, I think we must find another term. If not, we, too, are wielding the lever, however well-intentioned our writing may be. English has a lot of words. (Oxford lists 600,000). Surely we can find a better way to have this discussion, especially as it is intended to serve a good purpose.
Sorry for the interruption. Now back to our regular programming.
I appreciated the "story" here to question my biased views. What I did not hear is how the native born US citizen is impacted? Or did I miss that. It started with those in the shadows. And what about my friend who is 62, body worn out from a life of manual labor, losing his food assistance benefits? He took is choosing between rent and food. Who is worried about helping him in the community? Or are we worried about the illegals who are in the shadows, or the people of Ukraine where another chunk of money was found to have been sent off somehow stuffed in a small pocket unannounced to us (I read this a day or so ago...money found to have been sent unknowingly?). I have compassion and I am fed up with the federal and state government putting illegal aliens ahead of US born people who are struggling. I agree none of these people out money away. How could they? They were on the razor's edge pre pandemic. I think that would be Polly Anna thinking to assume people would have saved money. Plus our dollar buys so much less that even if you saved, you're not going to make it easily through skyrocketing food gas, living prices. It's ludicrous and overwhelming. I don't know the answer. But I would like to stop paying for Ukraine (and other senseless money policies that we have no need to be paying for) and tighten our borders. Our Americans need our help, do they not?
People paying student loans and non-privileged don’t overlap much
Excellent compilation of issues creating a "cliff." Certainly affects many. Add the ongoing repricing of assets and debt which affects most. Not to mention an economic recession (if/when it finally happens) which will impact everyone. Fed must walk a tightrope to avoid a lot of economic pain.