Far-left congresswoman Rashida Tlaib, D-Mich., has released a plan that would pay lower- and middle-income Americans thousands of dollars every year—in exchange for doing absolutely nothing.
The Washington Post reports, “Tlaib’s bill would give direct cash help to those at the bottom of the income distribution — annually offering $3,000 to individuals and $6,000 to families — in an attempt to reduce poverty in the United States and bolster the wages of the poor.”
In an interview with a Fox affiliate in Detroit, Tlaib called her plan “earned income tax credits on steroids.”
“This is basically a broader umbrella for families that make $50,000 or less if you are single, or $100,000 or less if you are a family,” Tlaib added.
The proposal offered by Tlaib, a member of the Democratic Socialists of America and political ally of socialist congresswoman Alexandria Ocasio-Cortez, D-N.Y., would cost “trillions” of dollars, according to the Washington Post’s report, and serves as yet another reminder that many Democrats have absolutely no clue how basic economics works.
For starters, giving cash even to those who are unwilling to work would discourage them from finding a job, working more hours, or applying for a promotion. Why work harder—or even at all—if government is going to send you a check every month for doing nothing?
This one problem alone would severely and negatively impact economic growth. The U.S. Bureau of Labor Statistics reports there are currently more than 7.48 million job openings. How many millions more would be available if people were encouraged by checks from the government to cut back their hours or avoid work altogether?
Second, as any undergraduate student in a freshman-level economics class could tell you, flooding the market with cash would quickly cause prices of all sorts of consumer goods and services to increase, negating the alleged benefits offered by the plan for those who qualify for the tax credit. In the end, these consumers’ purchasing power would likely remain the same.
As hard as it might be for socialists like Tlaib to believe, you can’t grow the economy or alleviate poverty by stealing money from some and throwing it haphazardly at a problem.
However, in the case of those who don’t qualify for the program, the situation would worsen significantly. Consider the following example: If you are an individual who earns $55,000 per year, you wouldn’t qualify under Tlaib’s proposal for the cash payments. But you would still be forced to pay the higher prices caused by increasing the amount of cash infused into the marketplace. That means Tlaib’s policy would inflict financial hardship on many middle-income individuals and families, especially those whose salaries are only slightly higher than the program’s cutoff.
Third, under Tlaib’s plan, millions of people, including college students, would receive these cash payments, even though they aren’t in poverty and don’t need the money.
Fourth, Tlaib’s cash bonanza would take huge amounts of money away from other parts of the economy. Someone is going to have to pay the trillions of dollars needed to fund the program, and that means there will be less cash available in other markets and for entrepreneurs and business owners.
Even if the government were to print the money, it would inevitably harm millions of Americans, because whenever the government prints money, it means the dollars already in existence are worth less. Further, it’s worth noting this problem would also help to negate the asserted benefits of Tlaib’s program, because the inflation caused by printing money would offset the extra dollars provided to some Americans.
As hard as it might be for socialists like Tlaib to believe, you can’t grow the economy or alleviate poverty by stealing money from some and throwing it haphazardly at a problem. Innovation, technological development, reduced regulations, and free enterprise are what create real economic growth—not more social welfare programs.
Instead of killing millions of people’s incentive to work and enacting policies that would artificially drive up prices, Congress should implement reforms to existing welfare programs that would help people escape cycles of poverty. In many cases, people enrolled in welfare programs have an extremely hard time finding work because earning more money means losing the welfare benefits they have come to rely upon.
By allowing states to reform their welfare programs so that people can work their way out of poverty slowly and without suddenly losing access to benefits, millions of people would be incentivized to work instead of coerced into remaining stuck in poverty programs.
For example, states should enact work requirements for all able-bodied adults enrolled in any of their welfare programs. Work requirements allow people to continue receiving government benefits while gaining important work experience and skills development.
Before Republicans and President Bill Clinton passed legislation in 1996 reforming the Temporary Assistance for Needy Families program, including adding work requirements, there were 13.4 million Americans enrolled in TANF. Since 1996, enrollment in TANF has decreased by more than 70 percent.
Socialists and the far left in the Democratic Party don’t have any solutions to offer Americans. Their proposals always amount to the same-old failed strategy of putting government in charge of as much of our lives as possible, all while punishing middle-class and wealthy individuals for their success.
Tlaib’s cash giveaway wouldn’t end poverty. It would enhance and encourage it.