Government benefits accounted for 16.2 percent of personal income in the first quarter of 2009 according to new figures from the Bureau of Economic Analysis. This is the highest level since the data began being recorded in 1929. According to a recent article in USA Today government spending on benefits will be more than $2 trillion in 2009, which comes to about $17,000 per household. The dramatic increase is a result of poor economic conditions leading to increased spending mainly on unemployment, food stamps, and Social Security. USA Today reports:
The bad economy has prompted a 10%-15% jump in early retirements, the program’s actuary says. A 5.8% increase took effect January 1. Bottom line: $55 billion in new costs.”
These staggering new costs associated with the struggling economy have accelerated the entitlement crisis. Those who believe the problem remains distant should take note. The date the Social Security trust fund is set to run dry just jumped forward four years.