Wednesday, May 26, 2010

We are mostly wards of the State

Assuming "we" are Americans, more of us are now wards of the State than not, and that isn't even taking into account the banks and auto companies.

Private pay shrinks to historic lows as gov't payouts rise
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. [So 58% of personal income comes from non-private wages and salaries or other sources.]

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 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.

Sounds to Guambat like a slippery slope. Indeed, Greecy.

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4 Comments:

Blogger Jamie said...

And yet the remainder (capital-related payouts mostly) seems to be stable. Funny how the article doesn't mention that.

Is this really news? When people get laid off, government support kicks in and government expenditures rise while wage income falls. If this trend continues then it will be a problem, but more because economic growth is poor and lots of people are out of work.

26 May 2010 at 8:56:00 pm GMT+10  
Blogger NotZed said...

Sounds like the solution is easy then - just raise private wages then?

27 May 2010 at 1:09:00 am GMT+10  
Blogger Holden said...

"cut spending and cut taxes that will fix it"
LOL!!!

27 May 2010 at 1:15:00 am GMT+10  
Anonymous Anonymous said...

"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. [So 58% of personal income comes from non-private wages and salaries or other sources.]"

Reading the link, 41.9% are from private wages, 17.9% are from the government so approximately 40% come from non-private wage/non-govt wage/support program...

The only thing I can think of the other 40% is capital gains.

If that's true, it's the oldest story in the book, the rich are getting richer and the poor are getting poorer... but it's still not 59% are wards of the state.

27 May 2010 at 6:21:00 am GMT+10  

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