May 25, 2010
Obama wealth redistribution plan working: Government handouts soar as private pay dives to historic lowsTopics: Political News and commentaries
We can't say that Obama didn't warn us, and now we're getting a clearer picture of exactly what he meant.
From USA Today:
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.However, one doesn't have to be an economist to know that this isn't sustainable and that Barack Obama is racing the country down the road to bankruptcy, but since our spender-in-chief is so clueless, the article provides the input of an economist that Obama should take lessons from.
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.
Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.
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. "This is really important," Grimes says.As economist David Henderson of the conservative Hoover Institution points out, a shift from private wages to government benefits saps the economy of dynamism and "People are (getting) paid for being rather than for producing." One would think that even Barack Obama should realize sooner or later that we've run out of money even though he hasn't run out of ways to spend the money that we don't have and aren't likely to get with his job-killing agenda.
Posted by Richard at May 25, 2010 10:02 AM
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