Sign up for our newsletters    

Sign up for our newsletters   

Baltimore City Paper home page.

Hopkins Economist: Safety Net Works Just Fine

November 21, 2013
Photo by Michelle Gienow

Photo by Michelle Gienow

This just in, from the economic researchers at Johns Hopkins:

“The US safety net is very healthy and was extremely responsive to the Great Recession, helping families of all different types and at all different income levels.”

That’s Robert A. Moffitt, a Hopkins economist, who has studied how food stamps, unemployment insurance, and the Earned Income Tax Credit were used since the Great Recession started in about 2007.

He found huge increases in the outlays of all these programs: Food stamp spending doubled, from $30 billion to $65 billion, for example. Earned Income Tax Credits ballooned from $49 billion to $59 billion. This leads him to conclude that the programs worked as intended.

And that’s probably right as far as it goes. But then it is also true that 20 to 25 percent of all Earned Income Tax Credits are issued in error:  something like $12 billion a year. As anyone who has ever watched the storefront tax preparers work can attest, much of this error rate is fraud. You see people coming in with Social Security numbers written on their arm, each representing a dependent child. Ask the kids’ names and they can’t say.

The IRS tried to make tax preparers take tests to prove competency. The non-profit, Virginia-based “Institute for Justice” fought back; the issue is tied up in court thanks to these Libertarian freedom fighters—who hate regulation more than they hate fraud.

But whatever. The safety net works! Go back to sleep.

Tags: , ,

  • bosco222

    Oh yeah, the safety net is set up to help families. If you are a single person who lost their job, have financial trouble or lost your home you are SOL is this family-centric culture. If you are a family with a bunch of kids the US government will bend over backwards to take care of you, everybody else can go to the homeless shelter..