USA Today: 'Private pay shrinks to historic lows as gov't payouts rise'

The headline pretty much speaks for itself. A snippet from the piece:

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. “This is really important,” Grimes says.

That’s the understatement of the year. Is a Greece II in the works? Frightening.

Bob Owens blasts off on this issue in a must-read. Make sure to read the whole thing.

Carlos says:

May 25, 2010 at 10:39 pm

But in the Land of Butterflies and Unicorns, who cares, as long as we soak it to the “rich?”

That, of course, means soaking it to anyone who doesn’t make their living off the government, be it as an employed welfare worker (all the way from local restaurant inspector to Timmy Geithner and Duh-1, plus Congress and the state legislators) or an “honest” welfare recipient who doesn’t pretend to work.

nina says:

May 25, 2010 at 11:07 pm

No surprise here. BO is systematically destroying the private sector economy while increasing the size of government .

Kate says:

May 26, 2010 at 7:48 am

I just lost business to an on-line MT service that must use slave labor considering my docs only paid 6 cents/line and $4/page for templates. The office manager was nice and gave us no notice….insuiated that they were looking at an online service and the docs wanted to keep the MT’s….NOT!!

Anyone need an experience MT? I not only corrected their grammar, I audited their mistakes, and looked up addresses for their referring docs!!! Oh, well, now I am venting. But this is one way that they think they can lower costs in the medical field. Electronic records is another which anyone can tranlate into future public records for all our personally sensitive medical info. Good luck with keeping anything secret once you have the government involved. Of couse, they will be the only medical insurance in town, so who else would know?

Jo says:

May 26, 2010 at 8:39 am

Maybe when some of these liberals who still have jobs in the private sector lose them under this fool’s regime, they will finally wake up and smell the coffee–sadly too late for us all.

david foster says:

May 26, 2010 at 9:29 am

There are millions of people who directly or indirectly make their living off the government, and many of them are doing very, very well…so well that support for the Democrats is economically rational for them even if their taxes will increase significantly. See my post paying higher taxes can be very profitable.

Royce says:

May 26, 2010 at 11:48 am

It appears that BHO’s redistribution of wealth is working.

Matt says:

May 29, 2010 at 2:06 pm

No, we will never be in a Greece situation because at the end of the day we still have the power to print our money. It would be unwise to print massive amounts of money, but worse come to worse we could do it. That is the fundamental difference between the US and Greece: Greece does not have the power to print its money.

Prof. Grimes might have been trying to keep it simple, but his statement misses the point: government-payouts are unsustainable because we “can’t pay for it,” it’s unsustainable because it doesn’t produce anything. Why can’t we all just quit our jobs and have government have us all trade money the way we would have? Not because we “can’t pay for it,” but because we’d have no production of goods and services.