Welfare State: Handouts Make Up One-Third of U.S. Wages

[The Northerner]

Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.

Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.

“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”

The economist gives the country two stark choices. In order to get welfare back to its pre-recession ratio of 26 percent of pay, “either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion,” she said.

Read more: http://www.cnbc.com/id/41969508

[EOTE]

1. So social security is a handout now?

Christ, to say our media is pathetic is an incredible understatement. How the hell do they get away with this? You pay for something all your life and when you get it back, it's a handout? Same thing for unemployment insurance. Dear god this is sickening.

[underpants]

5. Also - unemployment INSURANCE

it is insurance. You pay hoping you don't collect but if you need it you need it.

Both BTW are matched by employers.

[varkam]

17. Exactly. Give me back my SS taxes then, if you're going to call it a handout.

:eyes:

[Yo_Mama]

25. You can object to the terminology

But the facts are right. It's called "personal current transfer payments".

Here's a link to Q3 GDP. It's Table 10 on page 11 (at the bottom):
http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp4q10_2nd.pdf

As of 2008, wages paid to employees (doesn't count insurance, etc) were 6.6 trillion. Personal current transfer payments were 1.9 trillion. Personal taxes were 1.44 trillion, and taxes for social insurance (primarily Medicare, Social Security and unemployment insurance) were .99 trillion. So the programs were, overall, in balance.


In Q3 2010, wages paid to employees were 6.5 trillion. Personal current transfer payments were 2.3 trillion. Personal taxes were 1.2 trillion, and taxes for social insurance were 1.02 trillion. So the programs, overall, are running a deficit.

That, and we are still running federal deficits of well over a trillion a year. Each year the amount of money the government has to pay on interest rises. Obviously there is no way to get back to even without cutting spending and raising taxes.

What do the words matter? If you want your Social Security, you'd better make sure that the taxes are adjusted to bring in enough money to pay for it. And Medicare is going to be cut - there is a very substantial Medicare cut in the healthcare reform, and more cuts will be made.

That's why I read the requests for state and local bailouts with some skepticism. We are going to raise taxes on both the middle class and the wealthy, but all we can get without producing diminishing returns is going to be needed just to pay SS and continue Medicare as some sort of real insurance program. There isn't money to bail out the states. Over time, when employment improves, the unemployment will be less of a drag and wages will pick up. But still we now have to fund much more of our government social welfare spending from income taxes.

There is no independent source of funding in either the Medicare or the Social Security Trust funds, and both programs are running current income/outgo deficits, and it is thought that neither one will ever run a surplus again in my lifetime.

So don't get mad about the words. Get mad about the situation, and lobby Congress to do something about it, and to ensure that whatever program cuts are made are designed to protect the most needy. Unless liberal thinkers get in this debate, the eventual decisions will be brutally unfair, and they'll be deferred too long.

I'm not saying you didn't pay into Social Security or Medicare. But the programs were never balanced once the birth rate dropped. We have known since the 1980s that we would be borrowing money to fund retirements for boomers. But we've already borrowed the money.

And really, most people don't pay in enough to Social Security to fund the retirement income they have been promised and expect to get from it. So while it is true that you paid, if you had been paying those same amounts into a private fund it wouldn't fund your retirement either.

[Chemical Bill]

27. It's a handout AND a wage! n/t

[Hannah Bell]

2. um, as about 20% of the population is unemployed or underemployed, & another significant

fraction are in low-wage jobs that, if they support children, don't bring them above the poverty line, I wonder what they want these people to do?

Also, Social Security is not a "government handout," it's a benefit paid for by working people directly from their paychecks.

WTF is this bullshit?

[FreakinDJ]

19. What did they expect when they OUT-SOURCED the ECONOMY

that the downward pressure on wages and lost Tax Revenues would not have a negative effect on State and Federal Budgets

[The Magistrate]

20. Of Course, Ma'am, Increasing Wages By An Aggregate Two Trillions Plus Is Unthinkable To CNBC Honchos

[Hannah Bell]

23. if i have the math right, i believe 2 trillion a year would pay for 40 million

$50K jobs....

seems to me at least that much is going to the top 1% in the form of tax cuts, bloated war contracts & bailout money.

[Donnachaidh]

3. so I paid into a system that is now considered welfare?

WTF?

SS, Medicare and UI are NOT frigging handouts!

[JuniperLea]

7. This is what makes me so mad!

SS and Medicare, if you looked at what they actually are and do, are more akin to insurance. We are forced to pay for this insurance. Now we are being told we aren't going to get our claims paid. Same ol' song and dance.

:banghead:

[prolesunited]

4. They should all just die

so the rich wouldn't be faced with this incredible burden.

[Bandit]

6. Funny how they NEVER contemplate that all this is in direct response to Republican policies.

Send all the money to the very wealthy and then wonder why there are so many poor...Then blame the poor for it...

[Mojeoux]

8. Just get the freeloaders to pay their back taxes Don't need Cuts. Don't need new taxes.

For example, the mining and drilling industries need to pay up on using OUR federal land.

Also, how much does Clarence Thomas and his Teabag wife owe the IRS?

[The_Casual_Observer]

9. Good paying blue collar jobs were all exported to China & Mexico

So it makes sense.

[Matariki]

10. Handouts?!

Social Security, Medicare and unemployment insurance are 'handouts'?

[BeyondGeography]

11. I always knew my tail-end-of-the-boom crowd would be fucked

Which doesn't make it any easier.

[frebrd]

12. Handout? Welfare? What the Fuck?

I paid into Social Security all my working life, and into Medicare from the time it first went into effect! No way in hell are they welfare or handouts!

:puke:

[bluestateguy]

13. I'm assuming this includes bank bailouts and defense contracts too

nt

[panader0]

14. Unrec-- Did you forget the sarcasm tag?

[iamtechus]

15. Let these bastards know how you feel about it:

You can email them at [e-mail]

My message:

Please make a public apology for the article referring to Social Security as a "handout". Social Security is fully funded by those who benefit from it. It does not contribute to the national debt or the budget deficit. Anyone who doesn't understand this has no business writing about government finance.

[anarch]

16. damn right! and what about all those federal pensions, and disability and whatnot?

those lazy people aren't even working, and they get paid these handouts? It's no wonder our country's so broke, paying for these lazy old couch potatoes to sit around and watch television. They should just go to their local church soup kitchen if they want handouts.

USA! USA! USA! Every man for himself! Only the strong shall survive! If you can't take the poverty and unfairness, why don't you move back to France or something, ya commies!

:puke:

[TNLib]

18. Write to them and complain

I did the author is incredibly ignorant.

https://register.cnbc.com/email/EmailSupport.jsp

[fittosurvive]

21. This is not good...

Starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain bigger under the president's plan.

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/16/AR2011021606897.html

[Kingofalldems]

22. Unrec for republican talking points

[louis-t]

24. What repugs don't understand:

As they strive to lower wages, they force millions more onto the welfare rolls they hate so much.

[RegieRocker]

26. Statistics such as this one are manipulated. Total BS.

Just because younger adults are having a hard time finding employment and anyone of any age along with the fact people are making a lot less means jack shit. We have baby boomers who are on disability due to health reasons. It is time to stop the loopholes and tax the fuck out of the rich. They need to put back into the system a large portion of what they took out. They benefited from those you're complaining about. They wouldn't have their wealth without them. They wouldn't be rich without the peoples blood, sweat, tears, roads and other infrastrructure. It's just common sense to reinvest into what made you wealthy. We don't need greedy miserly and self absorbed people in this country. They can get the fuck out and never come back.

[marmar]

28. Handouts? ..... That's daft even for CNBC.

nt