Lessons of the Great Recession: How the Safety Net Performed - NYTimes.com - 0 views
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it’s none too soon to begin asking the question: what have we learned about economic policy in this crash that should inform our thinking for the next downturn?
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Let’s start with the safety net since it’s a fixture of advanced economies and serves the critical function of catching (or not) the most economically vulnerable when the market fails
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For many of today’s conservatives, the increased use of a safety-net program is proof that there’s something wrong with the user, not the underlying economy.
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But while people do abuse safety nets — and not just poor people (think bank bailouts and special tax treatment of multinational corporations) — I want to see receipt of unemployment insurance, the rolls of the Supplemental Nutrition Assistance Program (food stamps), and so on go up in recessions. In fact, their failure to do so would be a sign that something’s very wrong, like an air bag that failed to deploy in a crash.
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There are two reasons that T.A.N.F. was so unresponsive. First, welfare reform in the mid-1990s significantly increased its work requirements
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Second, T.A.N.F. was “block granted,” meaning states receive a fixed amount that is largely insensitive to recessions
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it is a fixture of conservative policy on poverty to apply this same block grant strategy to food stamps and Medicaid. The numbers and the chart above show this to be a recipe for inelastic response to recession, or, more plainly, a great way to cut some big holes in the safety net.
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The official rate for children goes up over the recession, from 18 percent to 22 percent, but once you include the full force of safety-net (and Recovery Act) measures that kicked in, it holds steady at about 15 percent.
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this figure provides strong evidence of the effectiveness of the American safety net in the worst recession since the Depression.
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SNAP rolls remain elevated because their function remains critical in what’s still a tough job market for low-income households.
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the fact is that markets fail, and when they do, income and food supports must rise to protect the most economically vulnerable families.
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let’s get this straight: the poor and their advocates were not the ones who tanked the economy. Nor should they be on the defensive when the safety net expands to offset some of the damage. The right question at such times is thus not why the SNAP rolls are so high. It’s whether SNAP, unemployment insurance, T.A.N.F. et al are expanding adequately to meet the needs of the poor.