The number then jumped again after the financial crisis, spiking to the high teens.Īnd now, the coronavirus has officially sent this number into the mid-20% range, after hitting a record high 31% in April.Īnd that’s how creeping banana republic socialism comes at you: first slowly, then fast.
This number rose in the low teens starting in the mid-1970s (right after the Nixon Shock ended Bretton-Woods and closed the gold window). Putting that number in perspective, in the 1950s and 1960s, transfer payment were around 7%. Imagine what that income chart will look like after Biden’s $1400 checks go out? Stated simply, what all this means is that the government remains responsible for over a quarter of all income, or 26.9 to be precise! This, as noted earlier, was due to the latest round of government stimulus checks hitting personal accounts which in turn helped push the savings rate to a whopping 20.5% from 13.4% at the end of 2020. Shown in longer-term context, one can see the creeping impact of government payments, shown in red below.
This means that excluding the $2 trillion annualized surge in govt transfers, personal income excluding government handouts actually declined by $22.3BN from $15.696TN to $15.673TN, hardly a sign of a healthy, reflating economy. In January, this number was $5.781 trillion annualized, which was not only up by nearly $2 trillion from the $3.8 trillion in December it was also $2 trillion above the pre-Covid trend where transfer receipts were approximately $3.2 trillion. We are referring, of course, to Personal Current Transfer payments which are essentially government sourced income such as unemployment benefits, welfare checks, and so on. Now Playing Google Launches Stadia Gaming Platform Up Next One Punch Man: A Hero Nobody Knows: Street Date Announcement Trailer (PS4) Overwatch 2 – Gameplay Trailer Big carmakers get serious about esports Story of a Gladiator – Launch Trailer Facetime-style Word Game Seeks to Connect Players Paladins – Tiberius, The Weapon’s Master – Cinematic Trailer One Piece: Pirate Warriors 4: Release Date Announcement Trailer (Xbox One) 27% Of All Household Income In The US Now Comes From The Governmentįollowing today’s release of the latest Personal Income and Spending data, Wall Street was predictably focused on the changes in these two key series, which showed a surge in personal income (to be expected in the month when the $900BN December 2020 stimulus hit), coupled with a far more modest increase in personal spending.īut while the change in the headline data was notable, what was far more remarkable was data showing just how reliant on the US government the population has become.Recommended Videos Google Launches Stadia Gaming Platform
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