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On Thursday, July 15, qualifying families received their first round of expanded monthly child tax credits in their bank accounts as part of President Biden’s American Families Plan. While these payments are expected to dramatically decrease the number of children living in poverty by as much as 50%, they do come with some potential drawbacks. Real America’s Voice turned to Terry Sawchuk, founder and chairman of Sawchuk Wealth, for insight.
“This money is probably going to work its way back into the economy, so that’s probably a good thing. But one of the concerns I have is that there’s no financial education that goes with this,” Sawchuk tells the show’s Miranda Khan.
“I would like to see the money go directly to rent payments or food payments or things where it’s going to help them make good decisions… But the idea that we are just going to be taking this money and dumping it back into the economy the way they are planning on it is a little scary because what I’ve read is that they want to make it permanent.”
Additionally, this plan will increase the federal deficit by $1.3 trillion as millions of Americans remain unemployed, causing many investors to wonder how these credits will ultimately be paid for.
“They are just transfer payments from one group of people to another, whether it’s corporations or people in higher tax brackets who are going to pay a higher rate,” explains Sawchuk. “This is a redistribution of wealth and really a net negative to the economy.”
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Click here to watch the entire Real America’s Voice segment.