“The trouble with Socialism is that eventually you run out of other people’s money.”
- Margaret Thatcher
Private pay shrinks to historic lows
Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.
Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.
The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. “This is really important,” Grimes says.
Adding government jobs and “spreading it around” doesn’t work.
I think the pay and benefits for all elected and appointed civilian Federal officials (especially in the Executive and Legislative branches) should be indexed to the decline or growth in private sector wages. Maybe that would provide some incentive for them to stop sabotaging the economy.