Thursday, March 10, 2011

Uncle Sam as payroll department

Over one-third of Americans' income is now derived from government payouts:

Social Security, Medicare and unemployment insurance make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.
Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Eonomic Analysis data.
“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients.

We have become constituents by virtue of dependency, rather than by delegation and representation. No wonder the size of government continues to grow at an unrestrained rate. But as some people note lately, things that can't go on forever, don't.

(HT: Vox, who adds: "It is certainly fascinating to see that people are still decrying the evils of capitalism when more than one-third of all wages and salaries are actually socialist distributions. We can't even call them "transfer payments" anymore because the money isn't being taken from anyone prior to being distributed, it is being created through credit expansion. ... Most Americans recognize that having the federal government pay 100 percent of the nation's wages and salaries is not possible. At this rate, it will have to pay 50 percent or more by 2020, which I note tends to correspond nicely with my long-standing prediction that by 2033, the U.S.A. will no longer be an independent, sovereign nation.)

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