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May 25th, 2010
Socialism Shows Signs of Success

New Analysis has shown a major shift in the source of personal income from private wages to government programs.

This trend is not sustainable, and is actually quite alarming as 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.

The Bureau of Economic Analysis reports that individuals received income from all sources wages, investments, food stamps, etc. at a $12.2 trillion annual rate in the first quarter.

Key shifts in income this year:

The recession has erased 8 million private jobs

Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. "People are paid for being rather than for producing," he says. 

 

 


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