Dependents Outnumber the Producers

Now more than half of all Americans receive “significant income” from the US government. If this trend continues, soon we won’t have enough producers to support all the dependents. Then what?

Slightly over half of all Americans – 52.6 percent – now receive significant income from government programs, according to an analysis by Gary Shilling, an economist in Springfield, N.J. That’s up from 49.4 percent in 2000 and far above the 28.3 percent of Americans in 1950. If the trend continues, the percentage could rise within ten years to pass 55 percent, where it stood in 1980 on the eve of President’s Reagan’s move to scale back the size of government.

That two-decade shrink-the-government trend now appears over, if for no other reason than demographics. The aging baby-boomer generation is poised to receive big payments from Social Security and government healthcare programs.

“New Deal programs persist,” despite the Reagan revolution and its aftermath, says James Galbraith, an economist at the University of Texas in Austin. “They persist because they are largely successful and highly popular.”

Mr. Shilling’s analysis found that about 1 in 5 Americans hold a government job or a job reliant on federal spending. A similar number receive Social Security or a government pension. About 19 million others get food stamps, 2 million get subsidized housing, and 5 million get education grants. For all these categories, Mr. Shilling counted dependents as well as the direct recipients of government income.

Others have the same concerns I do:

Looking at the big picture, especially entitlements for older Americans, some experts worry about a fiscal undertow.

“I fear that we may be on the path to becoming a decrepit, high-unemployment welfare state,” says Daniel Mitchell, an economist at the libertarian Cato Institute in Washington. Economists differ regarding whether, or at what level, a high tax burden acts to dampen economic growth. European nations have shown, for example, that advanced economies can maintain generous social-welfare programs.

But Mr. Mitchell says these nations pay a price of more tepid growth. Sweden, he says, has in recent years dropped off the global Top 10 list for per-capita output. Ireland, by contrast, has kept the government burden low and enjoyed rapid economic growth.

Unfortunately, as was said earlier in the article, Americans like the paternalistic “cradle to grave” care. Who would have thought that Americans, who for decades prided themselves on their reputations as rugged individualists, are turning into a bunch of parasites. What a shame.

Update: Commenters Mantis and Lee don’t seem to have any reading comprehension skills because when they saw my comments referring to parasites, they failed to connect them to the context in which they were said, which was regarding the “Americans [who] like the paternalistic ‘cradle to grave’ care,” and accused me of considering those who serve in the US military, as police officers and firefighters, and in our branches of government as parasites. I suggest you stop inserting a meaning that isn’t there in order to serve your own purposes. Community colleges all over the country offer Basic Reading Skills classes. I recommend you sign up.

Trial by error
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