WSJ: Since 1960, entitlement transfers have grown twice as fast as personal income—to $2.3 trillion annually.
It is not over—and won't be anytime soon, because the country's social-welfare spending is generating severe and mounting hazards for the nation. These hazards are not only fiscal but moral.
The moral hazard embedded in the explosion of social-welfare programs is plain. Transfers funded by other people's money tend to foster a pernicious "something for nothing" mentality—especially when those transfers seem to be progressively and relentlessly growing, year by year. This "taker" mentality can only weaken civil society—even as it places ever-heavier burdens on taxpayers.
Generosity is a virtue, on that we can all agree with President Obama. But being generous with other people's money is not the same thing.
A growing body of empirical evidence points to increasing dependency on state largess. The evidence documents as well a number of perverse and disturbing changes that this entitlement state is imposing on society.
• Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income. Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960.
• According to the BEA, America's myriad social-welfare programs (the federal bureaucracy apparently cannot determine exactly how many of these there are) currently dispense entitlement benefits of more than $2.3 trillion annually. Since those entitlements must be paid for—either through taxes or borrowing—the burden of entitlement spending now amounts to over $7,400 per American man, woman and child.
• In 1960, according to the Office of Management and Budget, social-welfare programs accounted for less than a third of all federal spending. Today, entitlement programs account for nearly two-thirds of federal spending. In other words, welfare spending is nearly twice as much as defense, justice and everything else Washington does—combined. In effect, the federal government has become an entitlements machine.
• According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits.
As entitlement outlays have risen, there has been flight of men from the work force. According to the Bureau of Labor Statistics, the proportion of adult men 20 and older working or seeking work dropped by 13 percentage points between 1948 and 2008.
The American male flight from work is so acute that more than 7% of men in their late 30s (the prime working age-group) had totally checked out of the workforce, even before the recent recession. This workforce opt-out, incidentally, was more than twice that of contemporary Greece, the poster child for modern welfare-state dysfunction. The share of 30-somethings neither working nor looking for work appears to be higher in America than in practically any Western European economy. (But they keep busy by defending the welfare state in posts on BDC...)
• Arithmetically speaking, the recent American flight from work has largely been a flight to government disability programs. According to the Social Security Administration, the number of working-age Americans relying on Social Security's disability programs has increased dramatically over the past two generations.
In December 2012, more than 8.8 million working-age men and women took such disability payments from the government—nearly three times as many as in December 1990. For every 17 people in the labor force, there is now one recipient of Social Security disability program payments.
Number of food stamp recipients under Obama grew 75 times faster than number of jobs ...