Are You Better Off Now Than You Were Four Years Ago ?

That was the question Ronald Reagan asked in the 1980 presidential campaign. I think that somehow we have wandered back to that time. The only thing missing is the gas lines, and if war comes to the Middle East (which it will within the next year), we will have those gas lines again.

Yesterday Investors.com posted the following graph:

 The article states:

The American public’s dependence on the federal government shot up 23% in just two years under President Obama, with 67 million now relying on some federal program, according to a newly released study by the Heritage Foundation.

The conservative think tank’s annual Index of Dependence on Government tracks money spent on housing, health, welfare, education subsidies and other federal programs that were “traditionally provided to needy people by local organizations and families.”

Note the statement “other federal programs that were “traditionally provided to needy people by local organizations and families.”” The advantage of having charity locally controlled is that the local people know the people they are dealing with. The other problem with government charity is that the government has no incentive to downsize the number of people receiving charity–in fact, the opposite is the case. If I am a welfare administrator in charge of distributing money to fifty people and half of those people become self-sufficient, will I lose my job?

It is very easy to blame the rapid increase in dependency on the depth and length of the current recession, but the article points out that economic effects account for only one-fifth of the change in the index.

The article concludes:

Research seems to validate this connection. Various studies have shown that extending unemployment benefits can keep unemployment rates higher than they would otherwise have been.

Obama’s own former economic adviser, Larry Summers, noted in the 1999 Concise Encyclopedia of Economics that “government assistance programs contribute to long-term unemployment … by providing an incentive, and the means, not to work.”

That conclusion is called common sense!

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