"Investment Business Daily" had some interesting things to say this week:
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. Housing subsidies, expansion to Medicaid and welfare, along with a sharp rise in the use of food stamps is to blame.
"Dependence programs" now account for more that 70% of the federal budget. In 1962 it was only 25% of the federal budget.
At the same time, fewer Americans pay income tax. 49.5% did not pay any income taxes in 2009. Back in the 60's only 12% of Americans escaped any income tax burden.
Here is the big one. In 2010, for the first time ever, average spending on dependence programs per recipient exceeded the country's per capita disposable income! Government cheque recipients are now getting more money than wage earners and millions of those wage earners are working for the government in non-productive so-called jobs or are on the payroll of some industry that is dependent on federal spending, like health, education, or military.
That leaves the hard working earner or the productive business owner in the minority.
The problem is, everyone gets a vote. So who will vote to cut back on any kind of spending? And yet that is the only thing that will get America out of the red.
Having said that, the numbers are probably not that different for Canada.
1 comment:
Yes, it's frustrating for middle-class wage earners like us to see these kinds of statistics. My income was CUT 23% recently due to the financial trouble our hospital is in. I am getting a tax refund of a whopping 38 bucks (out of more than 8,000 dollars paid in) However, others I personally know earned less than me, but paid in NO federal income tax AND getting a REFUND of over 7,000 dollars! AND look at those who have FREE health coverage- those who are dependent upon these government systems while my husband and I currently have NO HEALTH COVERAGE because of rising costs and pay cuts. I'm sorry to sound off, but things are so imbalanced in our country!
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