AEI scholar Nick Eberstadt’s latest book, A Nation of Takers, provides a sobering analysis of the entitlements explosion and its effect on the American economy and culture.
It’s a reminder that without significant, Reagan-style growth and/or massive spending cuts, our entitlement system threatens to sink the American economy.
1. Although Social Security already existed, the Great Society launched the ever-expanding modern American welfare state:
Note: Derived from data on official transfers and changes in consumer price index. Source: US Bureau of Economic Analysis
2. The rate of entitlement growth per capita has been nearly twice as fast as per capita income growth for the last fifty years
3. In the 1960s, the federal government spent $2 on governing for each $1 it spent on entitlement transfers. Today that ratio has completely flipped:
4. It took only two generations for transfers to displace everything else the federal government does.
5. Here’s where the money goes:
6. In 1969, government benefits accounted for 7.8% of Americans’ personal income.
7. In 2009, government benefits accounted for nearly 18% of Americans’ income. And the regions which relied most on benefits in 1969 have become even more dependent.
8. Nearly 50% of the U.S. population lives in a household that receives some government benefits.
Source: Sara Murray. “Nearly Half of U.S. Lives in Household Receiving Government Benefit,” Wall Street Journal
9. 31% of US households are receiving means-tested public benefits.
Source: Unpublished U.S. Census Bureau data run commissioned by the Wall Street Journal, provided to the author by Sara Murray, January 16, 2012
11. As the Welfare State has expanded, Americans are working less.