Eurozone unemployment is 9.9 percent. Unemployment in “socialist” Germany is 7.3 percent. In the UK, it’s 7.9 percent. And check out this chart that shows the folks in Europe, like France, Germany, and the UK, who wait less for doctors than we do.)
The kooky Investors Business Daily put down the Ayn Rand long enough to type up an editorial leading off with this falsehood:
More than one-third of all wages and salaries in this country are actually government handouts. We should be alarmed that we’ve become a nation of dependents.
That led further down into this truly amazing claim about how the “truly privileged class” in America is the bottom 50 percent:
Today, more than 97% of federal income tax receipts are paid by the top 50% of income earners.
The bottom 50%? They pay less than 3% of the taxes, making it a truly privileged class because many of its members get to live at the expense of others.
Left unsaid, of course, is that the bottom 50 percent makes just 13 percent of total income.
The Journal’s James Taranto even understands that the report is misleading, but apparently figures it’s still worth pushing. Note the euphemism here:
This doesn’t give a full picture, since it omits income from saving and investment. But it does give a sense of why Americans are increasingly nervous about the growth in government spending, which has only accelerated since Barack Obama became president.
Taranto doesn’t give a full picture, either, since he lets them include Social Security et al in wages and salaries. But at least he pointed out that there are problems with this study.
Las Vegas Review-Journal senior opinion editor Thomas Mitchell wrote:
The road to serfdom is paved with government checks
The Atlantic’s Daniel Indiviglio couldn’t pass up on it to get that classic annoying Atlantic headline in the form of a question: “Is the U.S. Becoming a Welfare State?”
Uncle Sam has been aggressively increasing Americans’ allowance recently. Government entitlement programs have grown to account for 35% of wages, according to a new analysis by Madeline Schnapp, director of macroeconomic research at investment research firm TrimTabs.
What would a zombie lie be without Fox News amplifying it? Steve Doocy and Eric Bolling got into the act, Media Matters reports:
DOOCY: I saw this statistic, couldn’t believe it: a third of the people in this country are winding up with a handout from the government?
BOLLING: The government payouts account now for 35 — see that? — 35 percent of total wages in America right now. And that’s up from 21 percent in 2000 and you can see 1960 is only 10 percent. At this rate, in four years, the government will account for more than 50 percent of total wages in America. As baby boomers are retiring, they’re getting a lot of Social Security benefits, unemployment benefits. It’s a bad, bad scary trend.
Hey, Doocy, if something strikes you as unbelievable, there’s probably a good reason for that.
Of all these, only Jackie Headapohl, a blogger with Michigan Live, which is one of those newspaper co-op websites, has updated with a correction.
Applause to her. Tomatoes for everyone else.
It’ll be interesting to watch this zombie lie progress over the next days and months, and it will be fascinating to see how many of these outlets correct their errors. Help me keep an eye out for all that, will you?
(h/t to Thimbles for the Cafferty video link)
For these folks, this story was too good to check.
Oh, @Ryan. Talk about credulous. You are presuming that your list of media are engaged in doing good-faith journalism. No. These media organizations actually serve as semi-mainstream outlets for the conservative media to disseminate their "packages".Of course they wouldn't "check." That would be a function of journalism, and these people aren't journalists. They are hucksters.
Unfortunately, too few people realize that fact.
#1 Posted by James, CJR on Fri 11 Mar 2011 at 03:09 PM
I think people are confusing "handouts" with the proportion of the federal budget that goes toward entitlement spending. Social Security, Medicare, and Medicaid account for over 40% of the budget. Throw in other means-tested entitlements, interest payments, and other mandatory spending, and you're looking at two-thirds of the budget. No one will report that. Are they afraid to confront the elephant in the room?
Looks like your debunking is as bad as their fact-checking.
#2 Posted by C. Andrews, CJR on Fri 11 Mar 2011 at 04:57 PM
This should also be considered when you talk about these figures "35%? So what? It should be higher. Near 10% unemployment, under employed and individuals completely dropped out of the job market excluded, means there's a ton of unutilized labor out there. Unproductive labor means extra load on the welfare and extra tight on tax receipts and salaries. If you're using figures from a wounded and slowly recovering economy to make a point about its general structure, you're using bad figures."
Furthermore, you can expect more "welfare" as the population ages because American demographics have to swallow the aging boomers. So? What's the solution to that problem?
Ps, you only get close to a 35% figure if you multiply total governments spending 2010 figures:
http://www.usgovernmentspending.com/
6.037 trillion State and Federal
Multiply it by the percentages for Welfare, Health, and Pensions
http://www.usgovernmentspending.com/piechart_2010_US_total
(12% + 16% + 15%) * 6.037 = 2.596 trillion
and then divide that by compensation of employees received:
http://cjrarchive.org/img/posts/personalincomeBIG.jpg
2.596 / 7991.3 = 32.5%
If you use any other metric the numbers come to about 20%. As analysis goes, these figures look like number salad (is a medicare expense counted as part of your payroll income? Are cancer patients rich because, in order to afford their chemo, their salary must be huge? Why are we mixing all social net expenses with payroll instead of GDP?)
Too many people are going to hear about government "welfare" and think it's Federal only, deadbeat supplements only, and a feature of the permanent state of the economy. None of which are true, but these figures play into the existing anti-government prejudices.
#3 Posted by Thimbles, CJR on Fri 11 Mar 2011 at 10:04 PM
This should also be considered when you talk about these figures "35%? So what? It should be higher. Near 10% unemployment, under employed and individuals completely dropped out of the job market excluded, means there's a ton of unutilized labor out there. Unproductive labor means extra load on the welfare and extra tight on tax receipts and salaries. If you're using figures from a wounded and slowly recovering economy to make a point about its general structure, you're using bad figures."
Furthermore, you can expect more "welfare" as the population ages because American demographics have to swallow the aging boomers. So? What's the solution to that problem?
Ps, you only get close to a 35% figure if you multiply total governments spending 2010 figures:
http://www.usgovernmentspending.com/
6.037 trillion State and Federal
Multiply it by the percentages for Welfare, Health, and Pensions
http://www.usgovernmentspending.com/piechart_2010_US_total
(12% + 16% + 15%) * 6.037 = 2.596 trillion
and then divide that by compensation of employees received:
2.596 / 7991.3 = 32.5%
If you use any other metric the numbers come to about 20%. As analysis goes, these figures look like number salad (is a medicare expense counted as part of your payroll income? Are cancer patients rich because, in order to afford their chemo, their salary must be huge? Why are we mixing all social net expenses with payroll instead of GDP?)
Too many people are going to hear about government "welfare" and think it's Federal only, deadbeat supplements only, and a feature of the permanent state of the economy. None of which are true, but these figures play into the existing anti-government prejudices.
#4 Posted by Thimbles, CJR on Fri 11 Mar 2011 at 10:06 PM
By the by, not to change the topic but the usual regulatory capture topics (OCC) don't update on the Recent Comments list.
This has got to be the most ridiculous article on the Federal Reserve I've read in some time:
http://emptywheel.firedoglake.com/2011/03/10/the-folks-who-run-our-economy-believe-in-the-easter-bunny/
"'A months-long investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed’s Consumer Advisory Council said Thursday'...
And they’re not releasing the report–they’re keeping it totally secret! I can only presume that the logic and data (based on just 500 loan files) behind it is so laughable that releasing it would be more damaging than simply issuing this claim with no proof.
Nevertheless, as my list above makes clear, it is simply impossible to state that there have been no wrongful foreclosures and still claim to have even a shred of grasp on reality."
It reminds me of the Mishkin interview from Inside Job "You can't be serious. If you would have looked, you would have found things."
http://www.youtube.com/watch?v=FzrBurlJUNk (1:35 in)
And yeah, that was in reference to his time at the Federal Reserve.
#5 Posted by Thimbles, CJR on Fri 11 Mar 2011 at 10:24 PM
So a more accurate description would be "Government wealth transfer payments are now equivalent in size to 35% of all wages and salaries earned in the US"?
The author seems to find this idea comforting.
I can't say I agree.
#6 Posted by CTD, CJR on Fri 11 Mar 2011 at 11:04 PM
I have on occasion, for instance a sick-day home from work when the remote was across the room and I didn't want to move, watched broadcast news. I have never seen or heard Glen Beck, and I once listened to Rush until his whining voice snotty demeanor drove me back to listening to Pink Floyd's Dark Side of the Moon.
Observation: At least 50 percent of the population in the U.S. is below average in intelligence as measured on the WAIS. Given that fact...
Question: Does anyone in the upper 50 percent believe that this stuff is anything more than "entertainment?"
Despair: Next you're going to tell me that people read the National Inquirer because their inquiring minds want to know!
#7 Posted by BK, CJR on Mon 14 Mar 2011 at 09:30 PM
"Government wealth transfer payments Income from the poor to the rich are now equivalent in size to 35% of all wages and salaries earned in the US"?
Fixed
#8 Posted by El, CJR on Thu 17 Mar 2011 at 09:20 AM
Should read Income from the poor to the rich
#9 Posted by El, CJR on Thu 17 Mar 2011 at 09:25 AM