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Saturday, April 23, 2011

Welfare and benefits now surpass all tax money recived

At a time when the US government now borrows nearly half of the total money used to fund its annual budget, a new report shows welfare and benefit payments made to the American people has surpassed the total amount of tax revenues taken in each year from government receipts. This means that all taxes Americans pay is now given out to welfare and entitlement programs, and not for the required provisions to facilitate running the government, or the military.

This crossing of the rubicon between tax receipts and government entitlements came about because of a stagnant economy, lower GDP growth, and the lingering unemployment where tens of millions are still needing welfare programs just to survive day to day.

Households received $2.3 trillion in some kind of government support in 2010. That includes expanded unemployment benefits, as well as payments for Social Security, Medicare, Medicaid, and stimulus spending, among other things.

But 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. – Fox Business

Since 2008, there has been an acceleration in government spending, borrowing, and entitlement payouts. Much of this can be seen by the skyrocketing inflation that Americans are experiencing in the retail markets, as food and energy prices are quickly moving to the point that there is limited discretionary spending to help grow the economy. This domino affect is seen in two areas of job growth. First, with less discretionary spending, businesses cannot expand, and many in fact are closing their doors (Borders Books). Secondly, any jobs that are created are for much less wages than are necessary to provide a decent standard of living (McDonald's to hire 50000 workers).

Unfortunately, the debate on austerity measures in America may come much quicker than people realize, and it may be forced upon the public and the government, rather than allowed to be trickled in. The debt ceiling for government borrowing is just days away from being reached, and unless Congress passes a measure to raise it, the government will be officially broke.

When Presidents Roosevelt and Johnson began the foundations for the welfare and entitlement systems, no one could foresee that there would come a day when government welfare and benefits would surpass all tax revenues taken in by the government. However, that day has come, and there are few options available to deal with this issue as higher taxes will just create more people moving onto the entitlement system, and the current debt ceiling limits the government's ability to borrow their way out of the problem.


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