Government assistance outpacing tax intakes in US: Dangerous

There's a sad story making the rounds which should be Front Page News in this great land of ours, but it has received scant attention. USA Today reports that Americans depend more on government aid than ever.

Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA TODAY analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly 2 years old.

A record 18.3% of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010.

Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929...

From 1980 to 2000, government aid was roughly constant at 12.5%. The sharp increase since then — especially since the start of 2008 — reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems.

Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990. The federal government pays about 90% of the benefits.

"What's frightening is the Baby Boomers haven't really started to retire," says University of Michigan economist Donald Grimes of the 77 million people born from 1946 through 1964 whose oldest wave turns 65 this year. "That's when the cost of Medicare will start to explode." (read more)