Jeannett Escarcega shows her son, John, 4, a photo on her mobile phone in their east Denver apartment on Sunday, May 9, 2013. Escarcega encountered the "cliff effect" after accepting a $14.00 an hour job that triggered the loss of $500 in monthly food stamp support and even more in child care assistance (which was later reinstated for a $350 per month fee).
Perhaps the most important of the welfare reform measures passed by Congress 17 years ago doesn’t serve three-fourths of working poor families in Colorado according to an I-News analysis.
"We're going to use this fund to find the most promising nonprofits in America," he said when announcing the plan. "We'll examine their data and rigorously evaluate their outcomes. We'll invest in those with the best results that are the most likely to provide a good return on our taxpayer dollars."
The idea behind microcredit is that if you give poor people in developing countries access to credit, the ability to borrow, they will use that money to start or expand businesses which will eventually help them pull themselves out of poverty. But ever since these programs boomed in the early 2000's, questions have been raised about how effective they are.
On today's Planet Money, we meet a single mother who makes $16,000 a year — and who managed to fund a vacation at a Caribbean resort with an interest-free loan from one of the world's largest banks.
Edith Calzado gets credit cards with teaser zero-percent interest rates — then transfers her balance before the rate ticks up. She signs up for store cards to get discounts — then pays off her bill on time. She gets food stamps and lives in subsidized housing. Her son is doing well in school.