Heritage: Dependency on Government Skyrockets

Monday, 28 Jun 2010 09:10 PM
By: David A. Patten

A new Heritage Foundation study reveals that one year into the Obama administration, Americans are more dependent on the federal government than ever before in modern U.S. history.

The Foundation's annual Index of Dependence on Government jumped nearly 14 percent in the past year — the largest single-year increase since 1970.

Study director William W. Beach, who oversees the Foundation's Center for Data Analysis, described the result as "shocking."

"That's an enormous increase," he said. "The usual increase is somewhere between 3 to 5 percent, which is bad enough. But to see a 14 percent increase is just amazing."

The index is based on the level of federal government expenditures on a roster of services, including housing, health and welfare, education, food stamps, and so forth.

The base-year level of dependency, 100, was determined by the degree of dependence recorded in the model year 1980. By comparison, last year's dependency level was 272, more than 14 times the level of dependency recorded in 1962, the first year in which compatible federal data is available.

According to the study, the level of citizen dependency has jumped 49 percent since just 2001. The areas showing the great increase in dependency last year, according to the study:

Even before the advent of ObamaCare, health and welfare expenditures rose 22 percent.

Spending on rural and agricultural services, including food stamps, increased by 22 percent.

Housing-assistance expenditures jumped 15 percent.

Beach expressed concern that, with nearly 50 percent of American wage earners paying no federal taxes, and a rapidly expanding culture of dependence in America, the nation may be approaching a tipping point after which it will be politically impossible to make the changes needed to restore competitiveness to the U.S. economy.

Terry Miller, a former ambassador to the United Nations Economic and Social Council during the Bush administration, predicted Monday that Americans' sharply increasing dependence on their government to take care of them would have a "terrible toll" on U.S. international competitiveness.

"The thing that's really set the U.S. economy apart from other economies in the world historically has been the economic freedom enjoyed by our citizens," said Miller. "This has been known as the land of opportunity.

"If that becomes instead 'the land of the government dole,' which it looks like it's becoming based on the really horrifying results [in the study]," he said, "then I think what you're going to find is Americans no longer able to compete internationally."

Miller, who directs the Washington, D.C.-based Foundation's Center for International Trade and Economics, publishes a companion study each year titled the Index of Economic Freedom. The Index of Economic Freedom is an indicator of U.S. economic competitiveness compared to the economies of other nations, measures 10 categories of economic freedom.

The most recent Index of Economic Freedom showed the United States no longer among world leaders in economic freedom.

The top 7 most competitive free-market economies, according to the index:

Hong Kong
New Zealand

One of the problems with rising government dependency, Beach says, is that the federal government has no incentive to get people off government assistance programs.

With rare exceptions, he says, entitlement programs ratchet upward and rarely drop back down.

That means the growth in federal programs over the past year could prove extremely difficult to reverse, as U.S. leaders reluctantly recognize the need to address the nation's drastically spiraling level of debt.

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