Post by jgaffney on Mar 9, 2011 14:18:53 GMT -5
CNBC reports this morning on a disturbing trend in our economy:
Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.
Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.
“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”
Yet, in 2009, then-Speaker Nancy Pelosi solicited a report from the CBO about spending alternatives to revive the economy. In a report that showed how the CBO can be the lapdog of the majority party, it was claimed that increasing unemployment benefits would have a more immediate effect on the economy than lowering taxes. The reasoning was that unemployed people have less money, so any money given to them by the government gets spent right away, thus injecting money into the economy. That reasoning works great until you stop to ask, "Where is the money coming from?" No one bothered to ask that question.
The Democrats have been pursuing a War on Poverty since LBJ's Great society legislation in 1966. Would it be unreasonable take the Democrats to task over the singular failure of their programs, despite the billions and billions of dollars funnelled into them?
Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.
Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.
“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”
Yet, in 2009, then-Speaker Nancy Pelosi solicited a report from the CBO about spending alternatives to revive the economy. In a report that showed how the CBO can be the lapdog of the majority party, it was claimed that increasing unemployment benefits would have a more immediate effect on the economy than lowering taxes. The reasoning was that unemployed people have less money, so any money given to them by the government gets spent right away, thus injecting money into the economy. That reasoning works great until you stop to ask, "Where is the money coming from?" No one bothered to ask that question.
The Democrats have been pursuing a War on Poverty since LBJ's Great society legislation in 1966. Would it be unreasonable take the Democrats to task over the singular failure of their programs, despite the billions and billions of dollars funnelled into them?