We got to stop becoming a nation of takers.
January 25, 2013 by Dan Mitchell
If you don’t want to be depressed, you should stop reading right now.
You probably know that we’ve been suffering because of a rising burden of government spending. And you probably understand that much of the problem is the relentless growth of redistribution and transfer programs.
But you probably don’t realize how far America has traveled in the wrong direction.
In today’s Wall Street Journal, Nicholas Eberstadt of the American Enterprise Institute rips apart President Obama’s empty assertion that the welfare state is desirable.
…the president is tired of listening to critics of America’s entitlement programs, and as far as he is concerned, the discussion is now over. It is not over—and won’t be anytime soon, because the country’s social-welfare spending is generating severe and mounting hazards for the nation. These hazards are not only fiscal but moral.
Eberstadt shares a bunch of bullet points that should worry anybody who cares about the future of the nation, starting with an inverse version of Mitchell’s Golden Rule. Handouts have been growing twice as fast as overall personal income!
• Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income. Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960.
• According to the BEA, America’s myriad social-welfare programs (the federal bureaucracy apparently cannot determine exactly how many of these there are) currently dispense entitlement benefits of more than $2.3 trillion annually. Since those entitlements must be paid for—either through taxes or borrowing—the burden of entitlement spending now amounts to over $7,400 per American man, woman and child.
The $7400 figure for per-capita redistribution burden is astounding. Others have calculated that this is akin to $60,000 for every poor household.
And even though I’ve written about the 49 percent figure, I had no idea that such a small portion was due to the aging population.
• According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits. That percentage is up almost 20 points from the early 1980s. And contrary to what the Obama White House team suggested during the election campaign, this leap is not due to the aging of the population. In fact, only about one-tenth of the increase is due to upticks in old-age pensions and health-care programs for seniors.
A big problem is that many working-age people have decided not to work.
• As entitlement outlays have risen, there has been flight of men from the work force. According to the Bureau of Labor Statistics, the proportion of adult men 20 and older working or seeking work dropped by 13 percentage points between 1948 and 2008. …In December 2012, more than 8.8 million working-age men and women took such disability payments from the government—nearly three times as many as in December 1990. For every 17 people in the labor force, there is now one recipient of Social Security disability program payments.
The solution, of course, is entitlement reform.
But that’s just part of the answer. We also need to change the culture. If people decide it is okay to live off the government, even leftists have begun to admit that it is very hard to re-create a system of self reliance.