The 2012 Index of Dependence on Government, released today, should be a wake-up call for America. Published by The Heritage Foundation for the past 10 years, the Index tracks the growth in government dependence dating back to the early 1960s. This year’s edition shows an alarming trend. Among the most troubling facts: One in five Americans—the highest in the nation’s history—relies on the federal government for everything from housing, health care, and food stamps to college tuition and retirement assistance. That’s more than 67.3 million Americans who receive subsidies from …
Barron’s published its year-end roundtable discussion with 10 money managers and financial market experts on Saturday. The star investors voiced their concerns about three government-related problems that threaten economic growth and prosperity in this country. 1. Cumbersome government regulations are holding businesses back and discouraging investors from investing in American companies. Mark Faber, editor and publisher of the Gloom, Boom, and Doom Report in Hong Kong, warns, “The regulatory environment is bad under the current administration. I don’t see a lot of people wanting to invest in the U.S. Statistics …
Since the S&P 500 hit its high for 2011 on April 29 to August 10, 2011, $3.3 trillion invested in the U.S. stock market has been wiped out. The value of American stocks owned fell from $16.82 trillion to $13.57 trillion—19.3 percent. See Chart. That is more than the Gross Domestic Product–the value of all of the goods and services produced in a country—in 2010 of Canada ($1.3 trillion), the U.K. ($2.2 trillion), or Germany (3.1 trillion). While we may not know precisely for some time what triggered this decline …
The U.S. Treasury Department came out today with its Debt Position and Activity Report for July. The news is bleak. With the additional $238 billion the Treasury immediately borrowed when the debt ceiling was raised on August 2, total current debt now exceeds 2010 gross domestic product (GDP) for the entire United States. Debt at these levels is why Moody’s and Standard & Poor’s is concerned enough to be considering a downgrade of their credit ratings on U.S. debt. Debt as of July 31 totaled $14.342 trillion. That was made …
The Congressional Budget Office (CBO) announced yesterday that the Budget Control Act of 2011 would lead to $2.1 trillion in deficit reductions. But the CBO’s letter to congressional leaders is somewhat misleading. Table 3 of the document shows how much in discretionary and mandatory deficit reduction the CBO estimates would be produced by the legislation from fiscal years 2012 through 2021. They found about $918 billion cuts. The remaining $1.2 trillion in cuts is not predicted by year, because, as CBO notes, “The composition of the other $1.2 trillion in …
In the debate about raising the debt ceiling, the reality is often lost that the top 10 percent of income earners—those making more than $113,799 in 2008 (the latest year available from the IRS)—already pay 69.9 percent of the income taxes. The same top 10 percent, however, earn only 45.8 percent of the income. The IRS also reports that in 2008, the top 25 percent of income earners—those earning $67,280 or more—pay 86.34 percent of the income taxes, yet earn only 67.38 percent of all income in the U.S. (See …
Barron’s magazine published their mid-year round-table discussion with ten money managers and financial market experts on Saturday. The ten are unanimous in their belief that slower economic growth is in store for the second half of 2011. Slower economic growth makes it harder to find or keep a job. It means less money is going into paychecks to buy life’s necessities. It means less tax revenue for the deeply indebted U.S. government. It means less opportunity for today’s young people who will have to pay the national debt back. Many …
The Heritage Foundation’s 2010 Index of Dependence on Government, published today, showcases the disturbing trend of Americans becoming more dependent on their government – via their fellow non-dependent tax paying Americans – than ever before. The surge in the Index of 13.6% over last year takes the Index to an all time high. Government support for dependent persons has grown from $7,293 per person in 1962, to $31,950 per person in 2009, both amounts expressed in 2005 dollars. Many Americans pay no federal income tax for the dependency related programs …
Coverdell Education Savings Accounts were created in 2001 to provide parents with more options to pay for their children’s elementary, secondary, and college education. Unless Congress quickly takes action, those accounts will no longer be allowed to fund secondary and elementary school expenses. President Obama often talks of helping Main Street instead of rewarding Wall Street, and Coverdell accounts are a unique asset for Main Street investors. Parents can squirrel away $2,000 per year per child in Coverdell accounts. They can then invest that money however they like in stocks, …
A just released report by the Sutherland Institute introduces a metric—the Self-Reliance Index—that can be used to track people’s reliance on government and lack of self-sufficiency. You might call it the opposite of The Heritage Foundation’s Index of Dependence on Government. The report notes, “Government aid only creates an illusion that aid recipients are well-enough off. Just as a student who hires someone to help them get ‘A’s’ is not truly an ‘A’ student, a person who depends on government to fulfill his or her needs is not out of …
