Fox News reported yesterday that for the first time since the Great Depression, U. S. households are getting more from the government than they are paying in taxes.
Including expanded unemployment benefits, Medicare, Medicaid, Social Security, and stimulus payments, households received $2.3 trillion in some kind of government support in 2010.
The article reports:
"...that's more than the $2.2 trillion households paid in taxes, an amount that has slumped largely due to the recession, according to an analysis by the Fiscal Times."
"...Also, an estimated 59% of the 308.7 million Americans in this country get at least one federal benefit, according to the Census Bureau, based on 2009 data. An estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; and 3.2 million get Veterans' benefits."
These are not sustainable numbers.
The article further reports:
"The Fiscal Times reports that "the only other time government income support exceeded taxes paid was from 1931 to 1936." The Times notes that "government transfers of income to households started to overtake personal taxes at the start of 2008, and the gap has been widening."
"The difference between what households received and what they paid in taxes is about $125 billion, equal to a little more than "three times the amount Republicans and Democrats agreed to cut from government spending through Sept. 30," the Fiscal Times said. Typically, the gap between government transfers and taxes runs the other way, the Times reports.
""In normal times the household sector gives about eight percentage points more of its income in taxes than it receives in direct transfers," the Times quotes J.P. Morgan economist Michael Feroli as saying, adding that a return to normalcy, or this eight-percentage-point spread, is equal to about $1.2 trillion in income."
It's time to get back to letting the private sector grow and create jobs, rather than expecting the government to create jobs by continued growth. Smaller government means more prosperity for everyone.
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