Wednesday, April 27, 2011

Alarming Stat of the Day

Here’s another one of those statistics where you don’t know whether to laugh or cry. Consistent with the rising number of Americans on food stamps (now at almost 45 million and still rising), wages now make up the smallest share of income since record keeping began 82 years ago. This report in USA Today has all the details:

Americans depended more on government assistance in 2010 than at any other time in the nation’s history, a USA TODAY analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly 2 years old.

A record 18.3% of the nation’s total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929.

From 1980 to 2000, government aid was roughly constant at 12.5%. The sharp increase since then — especially since the start of 2008 — reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems.

Total benefit payments are holding steady so far this year at a $2.3 trillion annual rate. A drop in unemployment benefits has been offset by rises in retirement and health care programs.

Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990. The federal government pays about 90% of the benefits.

Of course, with the economy still weak, now would be the absolute worst time to cut back on this government largess. Then again, the economy may never recover unless fundamental changes are made in how it operates, not the least of which would be a rethinking of the role of government and, naturally, the amount of money it borrows and spends.


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