(H/T – Eric Odom)
CNBC reported yesterday that in January, personal transfer payments from government (including Social Security, Medicare, unemployment, veterans’ benefits, family assistance) equaled 35% (actually 35.2%) of the wages and salaries collected, a record figure.
Since the CNBC story did a horrible job of actually explaining things, I’ll draw your attention to the Bureau of Economic Analysis’ Personal Income and Its Disposition table, and especially line 17. Yes, I did take the liberty of including every year available in a manner that allows you to download it as a comma-delimited file (suitable for display in any modern spreadsheet).
I do need to make a clarification of CNBC’s characterization of things – that 35.2% of wages/salaries the governmental personal transfer payments does not mean those handouts made up 35.2% of those wages and salaries; those are two separate items. Rather, the $2.26 billion that flowed out of government from the “haves” to the “wants” is 35.2% of the $6.41 billion in wages and salaries.
The handouts are, however, a part of the total personal income. Last year set a new record in the percentage of income that flowed out of government from the “haves” to the “wants”, at a full 18.0% of the $12.54 billion of total personal income in the country.
How outrageous is that latter amount? When records began to be kept in 1929, government transfers from the “haves” to the “wants” made up only 0.9% of personal income. The Great Depression caused that number to increase to 2.9% by 1931, and despite Franklin Roosevelt’s New Deal, it remained in that range until World War II caused a reduction. In 1946, when veterans’ benefits spiked following World War II, that went to a temporary high of 5.7%. The last year of Lyndon Johnson’s Presidency, with his “War on Poverty” and Medicare in full swing, that number was 7.5%. That ratio reached 10% (specifically 10.5%) in 1974, and spiked at 12.5% in 1983 before dropping back to a low of 11.2% in 1989. Even as late as 2008, government handouts made up less than 15% of personal income (with a high of 14.9% in 2008). In 2009, it jumped to 17.2%.
