America is less than one percentage point away from officially being a welfare state.
The Wall Street Journal reports that 49.1 percent of the population “now lives in a household where at least one member received some type of government benefit in the first quarter of 2011.”
That’s a stunning statistic, especially when put into historical context: in 1983 that number was 30 percent. It has been steadily rising for the last 20 years, with the biggest jump coming since 2008.
“The increase in recent years is likely due in large part to the lingering effects of the recession,” the Journal reports, with more people getting food stamps, unemployment benefits and Medicaid.
Still, the Journal says, “Even without the effects of the recession, there would be a larger reliance on government.”
The Baby Boom generation is beginning to hit retirement, meaning more people are receiving Social Security and Medicare. Americans have paid into those programs during their working years, but the federal government has spent the Social Security surplus and Medicare taxes aren’t keeping up with costs.
We can easily know, with an accountant’s precision, where the money is going, but the real question is where is it going to come from?
Federal spending is at dangerously high levels. Total federal outlays have settled in at about 24 percent of Gross Domestic Product for the last four years. According to the President’s Office of Management and Budget, only one other time since WWII have we reached that level—1946 when spending was 24.8 percent of GDP.
Forget for a moment who is to blame. The real challenge is finding solutions. Polls consistently show most Americans believe the government spends too much money, but, when asked about specifics, they don’t want their particular benefit reduced.
As the Journal said, “The more people who receive benefits, the harder it’s going to be to make cuts, and it’s never popular to raise taxes.”
Washington, already short on political will and caught up in fractious us-against-them debates, appears unable to address the nation’s most fundamental problem.
So, on we go, transforming the social safety net into an intricate, ever-expanding web of benefits that now reaches half the country. The public good that is accomplished by providing a necessary or an entitled benefit (Social Security, Medicare) is becoming overshadowed by a growing class of dependency.
The problem with dependency—along with the unsustainable price tag—is that it never leads to prosperity. And without prosperity, one day the checks won’t be in the mail.