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The materialism driving child tax credits and inflation

AP Photo/Alex Brandon
Rep. Hakeem Jeffries (D-N.Y.) talks with Rep. Nancy Pelosi (D-Calif.) in the House chamber on Jan. 6, 2023. Democrats are pushing to extend the child tax credit, which was based not on need but on whether people have children.

Democrats in Congress recently have pushed to take the nation further in debt in order to write more checks to families with children. This is a demonstration of Congress at its most materialistic — representatives believe they can buy loyalty by writing checks, even if the recipients don’t need it. 

Voters should want something better from federal policymakers. The people don’t need cash; they need the government to provide the basics of order, justice and liberty. And the federal government is dropping the ball on its basic duties.

The push for extending child tax credits is simple. Politicians want to do popular things. Some are influenced by an ideology that assumes people care only about money; that in order to win votes, politicians have to ensure favored groups get extra cash. It often doesn’t matter to them whether the people need it or not, provided that the money goes to an important constituency. 

The thinking goes like this: Senator So-and-So voted for a law that gave you money. When it comes time for re-election, make sure you know who was on your side. 

It turns out that households with children are an important political group. Americans put a lot of stock into families, and there are a lot of policies — not just poverty-alleviation programs — that give money to families with children. 

It’s a big segment. There are 29.5 percent of American households that have children and there are going to be Republicans and Democrats in there. Swaying them to vote one way can make a difference in an election.

Although the politics can be compelling, the policy is awful. Voters shouldn’t want large transfers of money to people who may not need it. The child tax credit is not based on need; it’s based on whether people have children and what their income is. Income limits are generous and don’t phase down until married couples earn more than $400,000. Plus, there are no asset limits. So multimillionaire couples retired in luxury at age 30 are as eligible as poor, single mothers.

There’s no point. Going into further debt to pay people who don’t need it drives inflation and increases the burdens on the next generation. If politicians love families with children so much, they shouldn’t saddle those children with debt.

Yet the potential benefits of paying off an important constituency often blinds politicians to the problems. They look at something like the child tax credit and declare that it will “deliver additional relief for families,” as former House Speaker Nancy Pelosi (D-Calif.) said. Voters should immediately ask whether that includes relief for people who are doing fine. 

The American electorate should be far less materialistic than their elected representatives. People should want more from politicians than to have them take money from the least politically powerful to give to the most politically potent. Early 20th century newspaperman H.L. Mencken quipped that, “Government is a broker in pillage, and every election is a sort of advance auction sale of stolen goods.” It’s the refusal to bend to this crass tendency that keeps the government from becoming Mencken’s caricature. 

People should want instead for the government to secure the basics — order, justice and liberty — rather than to pay off the politically important. Government has a lot to do here.

The increase in inflation creates a lot of disorder. Keeping a stable currency is one of the responsibilities of the federal government. Congress ought to stop spending money when it’s chasing too few goods, yet the federal government did the opposite. Congress passes extra stimulus bills that take the nation further into debt and ignite greater inflation.

Yet politicians seem uninterested in the basics. It doesn’t allow them to take credit like they can when people collect checks. But the basics are what people should care about. They should want the government to function properly. And if they care a little more, maybe politicians will be interested in doing their jobs rather than writing checks to people who don’t need it.

James M. Hohman is the director of fiscal policy at the Mackinac Center for Public Policy, a research and educational institute in Midland, Mich. Follow him on Twitter @JamesHohman.

Tags Child tax credit COVID-19 relief package Government debt taxpayers

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