And the News on the Economic Front Just Keeps Getting Better and Better

From the USA Today:

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.

For economists, I think the words “really important” are code for:

“ASTRONOMICALLY IMPORTANT! THE MOST IMPORTANT THING YOU’VE EVER HEARD IN YOUR LIFE!”

Akin to pressing the emergency button at a nuclear power plant…

Advertisements

5 Responses to And the News on the Economic Front Just Keeps Getting Better and Better

  1. Bill says:

    I think it’s also important to note that wages have been falling since the 1970’s. This is why our taxes should be more progressive. Obviously more money is going to be spent on government services and the lower and middle classes only have so much to give, so lets tap that of the rich, who have only been getting richer as the median wage has fallen.

    • Nick says:

      Bill, your argument is getting tired. It really is.

      From WaPo’s Ezra Klein:

      http://voices.washingtonpost.com/ezra-klein/2010/04/can_we_close_the_budget_defici.html

      • Bill says:

        I’m not arguing that cuts don’t need to be made, I’m saying there is an increasing income inequality that could (and in my opinion should) but tapped to subsidize progressive reforms. I do think the federal government is spending way too much, although I would associate a lot of that with fruitless military ventures and bureaucratic red tape.

        I am happy you cited Ezra Klein, though. He’s probably my favorite blogger/journalist.

        And DCG, you may be getting bonuses, but I’m presuming you’re white collar. Blue collar workers have been increasingly marginalized as white collar workers have more-often seen wage increases.

  2. DCG says:

    Wages falling since the 70’s? Not for me! Up until 2009 I was getting a raise in the private sector of 6 – 14% each year plus bonuses. Now I’m on my second year w/no raise or bonus. Hope and change!

    And please define “rich”. According to some, “at a certain point you’ve made enough money”. What is that limit and for whom exactly?

  3. DCG says:

    Well, I’m not getting bonuses now. What is your proof that blue collar workers are increasingly marginalized? Many of them work through apprenticeships and receive union pay which results in higher wages and good benefits.

    My BIL is blue collar, works in manufacturing, and has continued to receive raises and bonuses while I have not (he receives compensation for OT which I do not). He also has platinum medical coverage.

    Income equality is a progressive fantasy. Name one country that has achieved that ideal and tell me about how successful they are.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: