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In an article published in yesterday's Washington Times, Patrice Hill writes:
The so-called "Great Recession" has left Americans depending on the government dole like never before.
For the first time since the Great Depression, Americans are receiving more money in government aid than they are paying in taxes. In her piece, Hill interviews Harm Bandolz, an economist at Unicredit Markets. Bandolz asserts that this massive increase in government spending is "unsustainable." He says that the federal government has borrowed record amounts of money to pump into the economy and it "cannot continue that binge for long."
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.
Hill also notes that with nearly 6 million Americans losing their jobs, there is fewer money coming into the government in the form of payroll taxes. In fact, the amount of taxes that individuals paid dropped by $325 billion and last year's record $256 billion drop in private wages was more than 40 times higher than the drop experienced in the entire 2001 recession.
Such widespread jobless helps to explain why unemployment benefits have quadrupled from $34 billion in January 2008 to $124 billion at the end of 2009. To help fund entitlement spending, the federal government has had to borrow huge amounts of money from foreign nations:
As a result of record U.S. government borrowing, total debt in the United States has soared to an all-time high of 370 percent of yearly economic output, far exceeding its peak of 300 percent during the Great Depression.
But is mortgaging our nation's future really the solution to the economic hardships that we face today? To echo the thoughts of Mr. Bandolz, piling trillions of dollars of debt onto future generations is simply unsustainable.
When our founding fathers formed America, they envisioned a country full of individuals who were independent from the shackles of government. They did not foresee a country full of citizens dependent upon the government dole; they did not foresee a nation dependent upon wealth borrowed from foreign lands.
Instead of trying to expand entitlement spending, the federal government should work to restore the independence of its citizenry by removing the burdensome regulations and job-killing taxes that force many Americans to turn to government aid in the first place.