All this is a way to hide the wicked truth of what globalization is bringing and will continue to bring to the U.S. Great for corporate profits and the top ring of capital owners - not so great for the labor pool as a few billion new competitors are brought online. [Dec 8, 2007: Do the Bottom 80% of Americans Stand a Chance?]
(And it's not just individual people the federal government is happy to send money it does not have to... it's bailing out the states in backdoor ways as well [May 5, 2009: Federal Aid Surpasses Sales Taxes as Top Revenue Generator for States])
It's not even a year later, and USA Today reports the figure of government handouts as a % of income has jumped ... we are now at 1 in 5.5 dollars.
It's actually quite amazing to think that WORKING / WAGES in the private sector are down from nearly 50% of all income to 40% in a decade - that shrinkage is staggering.
- 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.
- 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. (ponzi baby...ponzi) 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.
- 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.
- 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.
As with many of my long term predictions, I don't know when it will 'matter' but the yawning gulfs between the private v public sector workers, and the greater societal gulf in income as the middle class is carved up [Nov 29, 2009: 1 in 4 Children, and 1 in 8 Americans Now on Food Stamps] is going to be one of the largest issues of our time. For now, the government is busy handing out money and bestowing ever increasing debt onto future generations to kick these cans down the road. Be thankful we have the world's reserve currency because if we were not so fortunate, our "Greek moment" would bring to surface all this ugly we are hiding via ever growing government transfers.
In the meantime? I encourage all readers to strive for federal government jobs.
- 9.8% of personal income was paid as wages to government employees.