Redistribution Nation: 48.5% of U.S. in Households Getting Handouts

“Nearly Half of U.S. Lives in Household Receiving Government Benefit,” roars he headline, based on the latest U.S. Census data.

That ties in with the fact that, with two-thirds of federal government spending dedicated to redistribution, the government’s main function is now taking away money from some people and giving that money away for free to other people . It used to be that its main role was to provide essential services. Those essential services are being crowded out.

It’s worth repeating Patrick Lencioni’s observation, writing in Personal Excellence. He’s talking about socialism, but it equally applies to mixed economies – i.e. a mixture of capitalistic and socialistic policies, especially the ones where the latter gain in prominence, such as ours right now:

…First, socialism just doesn’t work—at least not for long. Most people won’t keep working hard for the greater good if they don’t receive the fruits of that work. The free-loader effect is the tendency of people to do less work when they realize they won’t see more in return. Over time, socialist societies experience decreasing productivity, risk-taking, and innovation, along with increasing tax rates, government programs, and expectations. When the economy falters, those expectations can’t be met.

Unfortunately, by the time people realize this, it is often too late for them to try a different approach, since there are more people who expect benefits from the government than there are people who pay for them. And thus begins a descent to economic and motivational malaise. Ironically, the people who socialism is supposed to help—the poor—only grows because they are joined by more people who drop out of the shrinking middle class…

That last observation – that the ranks of the poor only grow under such a system – is happening to us right now, as discussed two posts below.