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Stimulus Spending Drove Poverty Lower Again in 2021, Census Bureau Reports

“The idea was that pandemic insurance would find and fill in the gaps. The problem is you painted an entire wall to fill in a few cracks,” said Jonathan Parker, chief of finance at the MIT Sloan School of Management. If the pandemic aid had been targeted only to those who really needed it, he said, any inflationary impact would have been “much, much less.”

Reimbursable tax credits, including the extended child tax credit and the earned income tax credit, have lifted 9.6 million people out of poverty.

Some conservatives argue that falling poverty rates hold few lessons for the future.

“Okay, great, poverty has gone down a lot, but it hasn’t really happened — not on a sustainable basis,” said Michael R. Strain, director of economic policy studies at the American Enterprise Institute. “If you see poverty in a broader sense related to issues of self-sufficiency and income and upward mobility, then I think that a huge poverty reduction based on a one-off temporary income transfer is actually no poverty reduction at all. .”

But for many recipients, the aid was a springboard to a better life.

Among those who have escaped poverty with government assistance is Kristina Ennis, 29, a restaurant clerk in Pittsburgh, who gave birth to her first child last year. Maternity leave reduced her income and the pandemic led to fewer hours for her fiancé.

Their income, after taxes and work costs, would have brought them below the $25,000 poverty line. But the safety net provided them with aid worth more than $18,000, good for incentive payments, tax credits and food stamps. About a third of the aid, including the extended child benefit, was pandemic aid, with the rest coming from the permanent safety net.

Ms. Ennis said the financial pressures caused the couple to argue and become depressed until tax credits brought in nearly $8,000, alleviating their debts. She said the help helped her be a more observant mother and bought time for her boyfriend to find a better job, which more than doubled his pay. They used some of the money to fund their wedding, which is scheduled for Saturday.