Ryan’s Poverty … a repost


Paul Ryan’s Latest Rhetoric On Poverty Doesn’t Add Up To Any New Ideas

Congressman Paul Ryan (R-WI) introduced a new anti-poverty plan in a speech in Washington today. But while Ryan is trying out new rhetoric around the issue of poverty, his “American idea” is full of the same empty promises he’s been making for years, this time with Ryan Rhetoric 2.0. His plan to fight poverty doesn’t include a fair wage for hard work and would dismantle the safety net. We need an economy that works for everyone, and Ryan’s cuts to low and moderate income Americans are not what this country needs to continue to prosper.

Here are a few things we know about his plan:

1. The Math Doesn’t Add Up. Ryan claims his plan is deficit-neutral. That’s a 180 degree turn from his budget proposal from earlier this year, which gets over two-thirds of its cuts from programs helping low and moderate income families. So either the plan is a dressed-up version of his budget, or he has abandoned his goal to balance the budget.

2. “Consolidation.” Ryan’s rhetoric calls it consolidation, hoping you won’t notice he is actually cutting programs helping low and moderate income Americans. And we already know that this strategy doesn’t work. Ryan holds up the Temporary Assistance for Needy Families (TANF) program as a model reform of the safety net. But under TANF, extreme poverty rose, fewer families received help, and states were unable to respond to the Great Recession. Consolidating multiple programs into a single funding stream would carry these same risks. In fact, Ryan undermines his own argument by proposing to eliminate an already-existing block grant, the Social Services Block Grant, calling it “ineffective” (which, by the way, helps approximately 23 million people).

3. Not Every Idea Ryan Proposes Is Without Merit. Depending on the details, ideas such as reforming our criminal justice system to give people the opportunity to rebuild their lives have a lot of merit and could attract bipartisan support. In fact, Ryan is not a leader on this issue, which has already had a bipartisan team of Senate champions in Sen. Cory Booker (D-NJ) and Sen. Rand Paul (R-KY). On the whole, however, his plan would exacerbate poverty and inequality.

If Ryan were serious about cutting poverty, here are three policy ideas he could embrace — taken from a column by the Center for American Progress’s Melissa Boteach:

1. Increase The Minimum Wage. Ryan’s speech comes on the day marking five years since the last federal minimum wage increase. Progressive leaders and advocates around the country are marking the occasion by taking the “Live The Wage” Challenge — walking in the shoes of a minimum wage worker by living on the average minimum wage budget of $77 for one week. It’s simply not enough to live on. Raising the minimum wage to $10.10 could lift as many as 4.6 million people out of poverty.

2. Bring Our Work And Family Policies Into The 21st Century. Women are now the primary breadwinners or co-breadwinners in nearly two-thirds of families, but our workplace policies and public policies don’t reflect this change. One thing Rep. Ryan could do in this realm is support the Family and Medical Insurance Leave Act, or FAMILY Act, which would create a national paid leave program and stop the United States from being the only developed country that with no paid maternity leave. This is a critical poverty issue, as having a child is a major cause of poverty for families that can’t afford to leave the workforce.

3. Support High-Quality Child Care And Early Education. Poor families who pay out of pocket for child care spend approximately one-third of their incomes just to be able to work. Ryan could support policies to provide greater economic mobility for low-income families, like Head Start. He could also sign onto the bipartisan Strong Start for America’s Children Act, which would invest in preschool, quality child care for infants and toddlers, and home visiting as a resource to pregnant women and mothers with young babies, simultaneously helping parents work while boosting the future economic mobility of young children.

Instead, just a day after his speech, he and his House Republican colleagues will vote tomorrow to exclude millions of low-income working families from the Child Tax Credit, pushing millions of children deeper into poverty.

BOTTOM LINE: Addressing poverty with more than rhetoric is the challenge our country faces. America was not built on rhetoric, it was built on an idea that if we came together and worked hard, we could create a nation full of opportunity. There are policy proposals that exist that would help us do that — create an economy that works for everyone, not just the wealthiest. Paul Ryan’s latest rhetoric on poverty is not the answer we need.

Inequality hurts everyone NOT some …

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An Important New Report Argues Inequality Is Hurting U.S. Economic Growth, And It Isn’t The First

There are two refrains that we often repeat when describing our philosophy for economic growth: we need an economy that works for everyone, not just the wealthy few; and we need an economy that grows from the middle-out, not the top down. At the heart of both of those beliefs is the demand that our leaders address the growing economic inequality in this country that leaves the richest with an ever-growing share of our nation’s wealth, while squeezing the vast middle class. This inequality doesn’t actually hurt some while helping others — it weakens our overall economy and as a result hurts everyone.

A new report issued by economists at Standard & Poor’s Ratings Services agrees with these dire impacts of inequality. The report, entitled “How Increasing Inequality is Dampening U.S. Economic Growth, and Possible Ways to Change the Tide,” concludes that the widening gap between the wealthiest and everyone else is a key reason why our economic recovery is the weakest in the last 50 years. Pushing back against the oft-repeated and dead-wrong trickle-down argument on the right that a rising tide lifts all boats, S&P responds, “A lifeboat carrying a few, surrounded by many treading water, risks capsizing.”

This report is important because it comes from the business forecasting community, focused not on advancing new academic theories but on predicting for clients how the economy is working. It is far from the only voice, however, making the argument that income inequality is hurting economic growth. Here are a few other recent examples:

  • The International Monetary Fund (IMF): In a report issued this February, IMF economists make the argument that continuing to ignore income inequality will harm economic growth. “Lower net inequality is robustly correlated with faster and more durable growth,” they write. It is “a mistake to focus on growth and let inequality take care of itself.”
  • Billionaire Entrepreneur Nick Hanauer: Hanauer, who was the first nonfamily investor in Amazon.com, wrote the most popular article in Politico Magazine history, called “The Pitchforks Are Coming… For Us Plutocrats.” In the piece, he points out inequality doesn’t just hurt the economy, it creates political instability as well: “There is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out,” writes Hanauer. “You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None.”
  • Nobel-Prize Winning Economist Joseph Stiglitz: Stiglitz wrote a whole book on this topic, aptly named “The Price of Inequality: How Today’s Divided Society Endangers Our Future.” One of several reasons he gives for why increasing inequality hurts growth is that it reduces people’s trust in the system. “People are not machines,” Stiglitz writes. “If they feel that they are being treated unfairly, it can be difficult to motivate them.”
  • Economist and Best-Selling Author Thomas Piketty: In his 2014 best-seller Capital in the 21st Century, Piketty explains that wealth concentrating in the hands of a few at the top is not an accident in capitalism, but a feature. Governments need to intervene in order to prevent that concentration from weakening the economy and causing political instability.
  • The Federal Reserve Bank. Sarah Bloom Raskin, who resigned from the Federal Reserve Board of Governors in March to become Deputy Treasury Secretary, believes inequality was the cause of the crisis and the source of the slow recovery: “because of how hard these lower- and middle-income households were hit, the recession was worse and the recovery has been weaker.”

BOTTOM LINE: The new S&P report that argues income inequality is hurting U.S. economic growth is an important reminder that we need economic policies that make sure everyone pays their fair share to help the economy grow from the middle-out. And it’s far from the only source to make that case: A stronger middle class means more workers, more consumers, and a better economic climate for everyone.