American reliance on government at all-time high!
WASHINGTON - March 2, 2010 - The Second Great Depression has left Amerikans depending on the government dole like never before.
Without record levels of welfare, unemployment and other government benefits as well as tax cuts last year, the income of U.S. households would have plunged by an astonishing $723 billion - more than four times the record $167 billion drop reported last month by the Commerce Department.
Moreover, for the first time since the Great Depression, Amerikans took more aid from the government than they paid in taxes.
The figures show the devastating results of the massive job losses last year and indicate that the supposed economic recovery that some claim began last summer is not happening.
Economic growth typically depends on consumer spending, which is fed by wages, rents, interest and other forms of income. But the tentative revival of consumer spending in the second half of last year appears to have been fed largely by an extraordinary flood of government spending, as growth in other kinds of income has disappeared.
"Governmental support was critical in keeping the economy, particularly consumer spending, from completely collapsing during the crisis," said Harm Bandholz, an economist at Unicredit Markets. He said he is concerned that so much of the economic rebound is a result of government spending rather than a revival of private income and jobs. That situation is unsustainable, he said, because the government has had to borrow massively to prop up the economy and cannot continue that binge for long.
Without record levels of welfare, unemployment and other government benefits as well as tax cuts last year, the income of U.S. households would have plunged by an astonishing $723 billion - more than four times the record $167 billion drop reported last month by the Commerce Department.
Moreover, for the first time since the Great Depression, Amerikans took more aid from the government than they paid in taxes.
The figures show the devastating results of the massive job losses last year and indicate that the supposed economic recovery that some claim began last summer is not happening.
Economic growth typically depends on consumer spending, which is fed by wages, rents, interest and other forms of income. But the tentative revival of consumer spending in the second half of last year appears to have been fed largely by an extraordinary flood of government spending, as growth in other kinds of income has disappeared.
"Governmental support was critical in keeping the economy, particularly consumer spending, from completely collapsing during the crisis," said Harm Bandholz, an economist at Unicredit Markets. He said he is concerned that so much of the economic rebound is a result of government spending rather than a revival of private income and jobs. That situation is unsustainable, he said, because the government has had to borrow massively to prop up the economy and cannot continue that binge for long.
