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**SEPTEMBER 14, 2021**

Meyerson on TAP

How We Avoided Great Depression 2.0 Last Year

The great American socialist Michael Harrington used to say that if you
wanted to solve the problem of low incomes, you should try providing
money. If anyone doubted the soundness of this recommendation, those
doubts should be dispelled by a look at the Census Bureau's data
on
poverty rates last year, which the bureau released earlier today.

Beginning in March of last year, the pandemic sent unemployment soaring,
faster than it's ever grown before, and to rates not seen at least
since the recession of 1981. Nor did unemployment rates recede to
anything like pre-pandemic levels during the course of the year, as the
pandemic remained stubbornly and fatally with us.

Despite all that, the overall economy didn't plunge to Great
Depression levels in 2020, and the share of Americans living in poverty,
rather amazingly, was actually

**lower**than the share living in poverty in 2019.

And that's entirely because the government addressed the problem of
abruptly lower incomes with money.

According to an analysis

of today's data by the Economic Policy Institute, two programs enacted
last year to mitigate the pandemic's economic toll are largely
responsible. The first was the expansion of unemployment insurance,
adding a $600 weekly benefit to whatever the various states were paying,
and also extending eligibility to independent contractors and otherwise
ineligible low-income workers. These expanded UI benefits kept 5.5
million people from descending into poverty last year, which, EPI
calculates, is

**ten times**the number of Americans rescued from poverty in the year
preceding. And if Congress had not curtailed the provision of those $600
UI supplements as of last July, the multiple would have been a lot
higher than ten.

The other anti-poverty measure the government enacted was the provision
of $1,200 stimulus checks in the spring of 2020 to adults with incomes
under $75,000 and $500 to each child under the age of 17. By EPI's
calculations, this kept 11.7 million Americans out of poverty.

Since the Democrats took control of the government this January, more
such programs have been created, most notably the Child Tax Credit,
which lifts more than half of impoverished American children out of
poverty. The CTC was authorized for only one year; its extension depends
on its inclusion in the pending reconciliation bill, and its continued
efficacy depends on the Democrats' not narrowing its scope, as West
Virginia Sen. Ebenezer Scrooge-excuse me, Joe Manchin-has called
for.

So, yes-money is a very efficient way to solve the problem of low
incomes.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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