November 9 2012

Entitlement Nation: Close to Half of the Country Receives Public Assistance

Vicki E. Alger

Think government entitlement programs are a safety net for the exceptional few who’ve fallen on hard times? Think again. Close to have the country participates in some form of government entitlement program of one kind or another, according to a new analysis from the Institute for Policy Innovation. Authors Merrill Matthews and Mark E. Litow explain that:

The U.S. Census Bureau says 108 million Americans live in households where at least one person participates in a means-tested program. We estimate about 80 million are the primary recipients, though millions more share those benefits. That number has been growing rapidly under President Obama. Since the president took office:

Medicaid has grown from 46.9 million to 56 million people;

Disability beneficiaries have increased from 7.5 million to 8.8 million; and

The food stamp program has grown from 32 million to 47 million Americans.

Add to that 80 million beneficiaries roughly 40 million Americans age 65 or older on Social Security and Medicare (about 9 million of the 49 million on Medicare, including some under the age of 65, also receive means-tested benefits).

That 120 million does not include the numerous smaller entitlement programs. Put them all together and a number approaching half of the country participates in an entitlement program.

The spending on those programs—even before counting in the 16 million new Medicaid beneficiaries once ObamaCare kicks in 2014—is both staggering and growing faster than the economy is. As Matthews and Litow find:

For fiscal year 2012, the country spent roughly $2.2 trillion of its $3.7 trillion budget on entitlement programs-about $400 billion less than the $2.6 trillion in gross annual revenues. In addition, interest on the federal debt was $220 billion.

And that’s just the federal spending. States are spending like it’s going out of style as well: “When state spending is included, total welfare spending rises from $746 billion to $1.029 trillion,” according to the authors.

There are a few steps back to fiscal and social sanity. Limit spending to those in genuine need. Encourage economic growth so people can get back to work and off the welfare rolls. And finally, we need to take personal responsibility by saving for our own retirement rather than relying on government or our employers to do it for us.

Otherwise, say Matthews and Litow, the “fiscal cliff” approaching at year’s end will be nothing “in comparison to the ‘entitlements cliff’ being forced on us by a multitude of entitlement programs that we can no longer afford.”

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