Private Pay Shrinks to Historic LowsRandall Holcombe • Tuesday May 25, 2010 8:29 AM PDT •
That’s the headline in this USA Today article. Some excerpts:
“Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year... At the same time, government-provided benefits—from Social Security, unemployment insurance, food stamps and other programs—rose to a record high... 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...”
Will we, collectively, come to the same realization Professor Grimes has, or will we keep moving toward the situation Greece finds itself in now? Perhaps we’ll get some indication in November.