Government Payments to Households Grow

The Census Bureau recently released figures that show 49.1% of the U.S. population lives in a household that received some type of government benefit or assistance in the first quarter of 2011.  This figure has ballooned since the early 1980’s when it measured 30% and since 2008 when it measured 44.4%.

This figure is likely affected by retiring baby boomers receiving Social Security and Medicare but the staggering increases serve to underline the fiscal issues facing the country.  Where will the dollars come from to support the non-stop government spending and existing budget deficits?  Tax increases threaten to suffocate the private sector (producer class) that creates wealth to fund the government spending.  Decreasing government spending too quickly may also lead to a recession as the economy is still in a fragile state.

Long term the best solution likely lies somewhere in between – a combination of spending decreases and tax increases phased in over time.  Many of these tough decisions will become even tougher, though, if and when the percentage of the voting population receiving government subsidies becomes the majority.  49.1% is getting awfully close.


The information in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements. The information does not attempt to examine all the facts and circumstances that may be relevant to an individual’s financial needs. Payne Wealth Partners, Inc. is not soliciting any action based on these statements.

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