The previous summer, Mark Zandi, the chief economist for Moody’s Analytics, who was serving, at the time, as an adviser to the McCain campaign, testified before Congress on the need for an aggressive stimulus program. In his testimony, he included a handy chart, based on his own algorithm, that listed the “Bang for the Buck” that various stimulus measures would provide. According to Zandi’s calculations, aid that went to wealthier Americans would not be very effective as stimulus: for every dollar that Congress cut from corporate taxes, the G.D.P. would gain 30 cents; making the Bush tax cuts permanent would boost it by 29 cents for every dollar added to the deficit.
Stimulus measures that gave money to poor and distressed families, on the other hand, would be much more productive: extending unemployment-insurance benefits would boost G.D.P. by $1.64 for every dollar spent. And at the top of Zandi’s list was a temporary boost in the food-stamp program, which he calculated would produce $1.73 in G.D.P. gains for every dollar spent.
This New York Times Magazine feature on how Obama’s early experience in the poverty-stricken neighborhood of Roseland in Chicago kindled his political ambitions for change, and made urban poverty a focus of his first run for president is comprehensive and very interesting—mostly because urban poverty has virtually disappeared as a key issue for the president. The reason it disappeared? The economic crisis caused everyone—the poor, the middle class, the rich—to say, “hey, I’m struggling too, how about helping me?” and the administration had to switch gears in the name of “the economy” instead of what kind of drastic approach it could take to ensure that 1 in every 10 children are no longer living in deep poverty. A few things have become clear: 1) As the excerpt above shows, our dollars go much farther when we focus them on the poor, and 2) We need a new drastic approach to end poverty in the U.S. because pouring billions of dollars into food stamps and unemployment insurance will enable people to pay their rent and prevent them from being hungry, but it won’t do very much to actually get them out of poverty.