The Washington Times has a sobering report on the state of the economy and how the recession has made nearly all Americans more reliant on the government.  


“…for the first time since the Great Depression, Americans 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 economic recovery that began last summer is tenuous and has a long way to go before many Americans resume life as normal, analysts said.  

While wages and other job-related income fell by a record $206 billion last year to $7.84 trillion, transfer payments from the government such as unemployment checks and Social Security burgeoned by $231 billion to $2.1 trillion. Meanwhile, the amount of taxes that individual Americans paid plummeted by $325 billion to $2.1 trillion as a result of middle-class tax cuts and because nearly 6 million people were thrown out of work and are no longer paying payroll taxes. 


Commerce economists said last year’s unprecedented drop of $256 billion in private wages – the mainstay of consumers in ordinary times – was particularly dramatic, and was more than 40 times larger than the drop in wages during the entire 2001 recession. 


Equally dramatic, a measure of income that closely tracks the ravages of the recession also plummeted by an unprecedented $384 billion. That measure excludes transfer payments and adjusts for inflation. It has stabilized at $9.1 trillion since the middle of last year, in a sign that the worst of the job and income losses are over.”  


This greater reliance on the government is obvious when you consider the heated reaction to Senator Jim Bunning’s (R-KY) actions last week to halt an extension of unemployment benefits (which in some states has been extended to a staggering two years).  Citing his concern that the move would add to the already enormous federal deficit, Bunning issued a press release explaining his position:   


“I have offered the same COBRA, flood insurance, unemployment insurance, Satellite Home Viewing Act, highway funding, SBA loans, small business provisions–I have offered to do the same thing for the same amount of time. The only difference I have, and some of my good friends from the other side of the aisle, is that I believe we should pay for it. There is a right over the last 3 years of the Democratically controlled Congress. We have run up $5 trillion in debt. There has to be a time to stop that.”  

And it wasn’t even a month ago that President Obama agreed with Senator Bunning.  During his February 13th weekly radio address, the President touted his signing of the pay-as-you-go bill, saying: 


“In a perfect world, Congress would not need a law to act responsibly, to remember every dollar spent would come from the taxpayers today – or our children tomorrow.  But this isn’t a perfect world. This is Washington. And while in theory there is bipartisan agreement on moving on balanced budgets, in practice, this responsibility for the future is often overwhelmed by the politics of the moment. It falls prey to the pressure of special interests, to the pull of local concerns, and to a reality familiar to every single American — the fact that it is a lot easier to spend a dollar than save one.” 

Passionate words from the President about being a good steward of taxpayer dollars, but short-lived.  Because its business as usual again–right back to the “politics of the moment” where congress thinks nothing of extending unemployment benefits without paying for them.  Its just the latest reason to forget that “every dollar spent would come from taxpayers today.”


Senator Bunning clearly isn’t saying the unemployment benefits shouldn’t be extended.  He is only saying we need to pay for them by finding programs to cut in order to offset the cost.  And does anyone really think it’s hard to find a wasteful program or two (or dozen) to cut?  Perhaps the President might review some GAO reports (which found improper payments to contractors totally $98 billion) or how the recent report issued by Senators McCain and Coburn that detailed nearly $200 billion in waste through projects funded by the stimulus bill. I’m sure it won’t be that hard to find a mere $10 billion. 


Until Congress manages some fiscal control, deficits will continue to grow and the American people will become ever more reliant on big brother.