The Obama Way: People Are Paid For Being Rather Than For Producing
Tuesday, May 25, 2010 at 11:34AM That change we can believe is the gift that keep on giving. Everyday it seems there is a new story to rejoice about. Today, it comes to us from USA Today.
Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.
Sounds like change you can believe in to someone who has been sitting on their fat butts their entire life waiting for others to provide for them.
Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.
The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.
Key income shifts this year:
• Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.
•Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.
The shift in income shows that the federal government's stimulus efforts have been effective, says Paul Van de Water, an economist at the liberal Center on Budget and Policy Priorities.
"It's the system working as it should," Van de Water says. Government is stimulating growth and helping people in need, he says. As the economy recovers, private wages will rebound, he says.
Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.
Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. "People are paid for being rather than for producing," he says.
Reader Comments (2)
The unemployment and social security are not surprising and I don't mind that some of my check goes to help them out.
But those who do nothing but sit on their ass all day long smoking whatever and popping out kids so they can get their check need to be pushed into the Mississippi river. Let new Orleans have them, then Brangelina can adopt them all and take care of them.
And 1 last thing, if I have to pee in a cup to get the job that pays you to do nothing all day long, you need to pee in a cup to qualify for it. Bet that would cut down the cost of paying those 'benefits'.
Obama just keep piling the moochers onto the swaged back grey Mare and her
under-belly is already dragging the ground, maybe just one day we will say,
enough is enough and will put a stop to this stealing they call social justice on
the back of all Americans....
I'm already so poor, i have to fart in my pocket to make a s'cent'....