Wednesday, November 11, 2009

What happens when everyone depends on the government?

Here is a depressing analysis.
By one measure, the government already plays an outsize role in our so-called free-market economy--and it has little to do with the recession. Economist Gary Shilling has calculated that 58 percent of the population is dependent on the government for "major parts of their income," including teachers, soldiers, bureaucrats, and other government employees; welfare and Social Security recipients; government pensioners; public housing beneficiaries; and people who work for government contractors. By 2018, Shilling estimates, an astounding 67 percent of Americans could be dependent on the government for their livelihood.
This has happened under both Republicans and Democrats.
Tea-party ranters might cite this as evidence of liberal policies run amok, but the growing-government phenomenon transcends party politics. In 1950, the starting point for Shilling's analysis, just 29 percent of the nation depended on government for its income. By 1980, that had risen to 61 percent--higher than it is today--thanks to demographic factors and the needs of a changing nation. The military got larger and defense spending grew as America took up its role as a superpower. Baby boomer kids required many more schoolteachers. The number of Americans receiving payouts from Social Security, enacted in 1935, increased 10-fold. Food stamps and other safety-net programs of the 1960s and '70s began to reach millions of Americans.

From 1980 to 2000, Americans became less dependent on government. California and other states cut their budgets and reduced spending. The military got smaller after the Cold War ended. Welfare reform in the 1990s kicked many people off the dole. And the private sector boomed during those two decades, accounting for a larger share of the labor force. By 2000, the portion of the population dependent on government had drifted down to 54 percent.

But it reversed course after that, and it seems poised to keep going up. The size of government has generally held steady since 2000, but globalization, technology, and other factors have led to weak private-sector job creation over the past decade. And that was before the recession destroyed more than 8 million jobs. So the government has employed an increased share of Americans. The other big change since 2000 has been a near tripling of food-stamp recipients, as low earners got left out of the housing and stock-market booms and then suffered worse during the recession.

The next big shift will come as baby boomers begin to retire, boosting the number of Social Security recipients 27 percent by 2018 and threatening the solvency of the program. Shilling has another dire prediction: Economic growth will be so weak for the next several years that without government support, the unemployment rate will rise to 23 percent in 2018. Since that's politically intolerable, government will continue to spend money to create jobs, he predicts, with nearly 25 million additional Americans employed as a direct outcome of government spending by 2018.
I know that liberals support government running as much as possible rather than evil private enterprise. But at some point, you need non-governmental workers to be working and building the rest of the economy to pay for all the lovely things that people look to the government to do.

6 comments:

equitus said...

globalization, technology, and other factors have led to weak private-sector job creation over the past decade.

huh?

Tacitus Voltaire said...

I know that liberals support government running as much as possible

incorrect

yet again, one of the primary ways that conservatives distort public discourse is to put stupid opinions into the mouths of other people
.

Bill B. said...

"I know that liberals support government running as much as possible rather than evil private enterprise."

How can you "know" something that is factually incorrect. You should get out and talk with a few liberals (like me) some time, Betsy. We'd be happy to tell you what motivates us, and what we look for in society.

Rick Caird said...

Bill B. Ok, let's just say the liberal solution to all problems is more government, because only government can solve the problem. Case in point: national health insurance; cap and trade; card check; etc.

For someone who claims he is not motivated by more government, it is strange to see all your "motivations" end up with that solution.

Duck, quack, is a duck.

Rick

tfhr said...

Biddle,

"...talk with a few liberals (like me) some time...."

Three minutes after you typed that line you trashed a different thread with some obscene comment that required Betsy to delete your remarks.

Has it ever occurred to you that your immature habit of insulting others here speaks loudest of all for you? The vile invective that pours forth in the majority of your posts overshadows any rational effort you may attempt and diminishes the positions held by thoughtful liberals. What is left is a picture of a warped individual and a warped political point of view that would revulse any true liberal.

Tacitus Voltaire said...

liberal solution to all problems is more government, because only government can solve the problem

incorrect
.