WASHINGTON, DC—Private pay reached a historic low of 41.9 percent in the first quarter of 2010 while government benefits were paid out to 17.9 percent of Americans, up from 14.2 percent in December 2007. Commenting in USA Today, Economist David Henderson of the conservative Hoover Institution stated a transition from private wages to government benefits depletes the economy of dynamism. "People are paid for being rather than for producing."
The underlying problem with this trend is tax receipts to the Treasury suffer even as federal spending continues to rise. Government benefits either carry a low tax burden or are returned in their entirety to the beneficiary in the form of tax refunds; which in turn means the Treasury collects less as it pays out more. Greece is an example of the result of such policies and Spain and Italy are the next to suffer the same Greek tragedy.
Germany has the same model and is publicly forecasting a wish to abandon the Euro and return to the Deutsche Mark. Upon the news, the Dow went into a free fall and the international markets suffered losses. Europe is full of top heavy governments all sick with the same illness and the American left is happily infecting the United State’s government while watching Rome burn all the while.
-- Killswitch Politick
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