Free Markets, Free People
Government dependency tipping point? Been there, done that ….
More on the increasing culture of dependency on government:
The percentage of people who do not pay federal income taxes, and who are not claimed as dependents by someone who does pay them, jumped from 14.8 percent in 1984 to 49.5 percent in 2009. This means that in 1984, 34.8 million tax filers paid no taxes; in 2009, 151.7 million paid nothing.
It is the conjunction of these two trends—higher spending on dependence-creating programs, and an ever-shrinking number of taxpayers who pay for these programs—that concerns those interested in the fate of the American form of government. Americans have always expressed concern about becoming dependent on government, even while understanding that life’s challenges cause most people, at one time or another, to depend on aid from someone else. Americans’ concern stems partly from deeply held views that life’s blessings are more readily obtained by independent people and that growing dependence on government erodes the spirit of personal and mutual responsibility created through family and civil society institutions. These views help explain the broad public support for welfare reform in the 1990s.
This ethic of self-reliance combined with a commitment to the brotherly care of those in need appears threatened in a much greater way today than when this Index first appeared in 2002. This year, 2012, marks another year that the Index contains significant retirements by baby boomers. Over the next 25 years, more than 77 million boomers will begin collecting Social Security checks, drawing Medicare benefits, and relying on long-term care under Medicaid. No event will financially challenge these important programs over the next two decades more than this shift into retirement of the largest generation in American history.
And yet we just got a budget from the President of the United States which essentially ignores that fact. Just like his previous three.
But more important than that is this culture of dependence that has perniciously grown in this country over the preceding decades fueled by politicians and the ideology of the left.
Libertarians and many Conservatives have been warning about this phenomenon for years. But in 2008, what had been a relatively slow ride to growing dependence became a ride on a rocket sled:
Not only did the federal government effectively take over half of the U.S. economy and expand public-sector debt by more than all previous governments combined, it also oversaw a second year of enormous expansion in total government debt at the federal level. Much of that growth in new debt can be traced to programs that encourage dependence.
In 40 plus years we’ve gone from a dependency percentage of 28.3% to over 70% in 2010. I don’t think anyone realized how big the change has been or what significance it has. But it has made us a nation of takers vs. makers.
As Heritage’s Bill Beach and Patrick Tyrrell explain, "the index score has grown by more than 15 times its original amount. This means that, keeping inflation neutral in the calculations, more than 15 times the resources were committed to paying for people who depend on government in 2010 than in 1962."
It is the same trap that countries like Greece were in and will result in the same collapse.
Ed Feulner adds some context to the increased percentage of dependence:
Perhaps the most startling part of the index concerns how much assistance is being distributed. Americans who rely on government receive an average $32,748 worth of benefits. How high is that? Higher than the average American’s disposable personal income: $32,446.
More than 67.3 million Americans rely on assistance from Washington for everything from food, shelter and clothing to college tuition and health care. These benefits cost federal taxpayers roughly $2.5 trillion annually.
So the president offers a 3.8 trillion dollar budget of which, according to these numbers, all but 1.3 trillion goes to “assistance”.
And in order to offset these “assistance” payments somewhat, the president decides that the only Constitutionally mandated expense within the budget – defense – has to pay the butcher’s bill.
We talk about “tipping points” often, but looking at that chart, I’m convinced that tipping point may have been passed years ago.
Some quotes to leave you with. Rep. Allen West, this past weekend said he has no problem with a safety net. His problem is “when that safety net becomes a hammock.” In this case a $32,000 hammock.
Alexis de Tocqueville reputedly said that the American republic will last only "until the majority discovers it can vote itself largess out of the public treasury." We’ve seen that majority discover it with a vengeance.
And finally, George Bernard Shaw said, ““Liberty means responsibility. That is why most men dread it.”
70% dependence says a majority now dreads “it”, and has decided it likes others, the makers, paying their way.
As one friend aptly described it on reviewing these numbers, “we’re screwed”.