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Tuesday, May 25, 2010

Obama's Redistribution of Wealth is Strangling the Economy

He's killing the goose that lays the golden egg just like Greece!

PhotobucketPrivate pay shrinks to historic lows as gov't payouts rise
By Dennis Cauchon
USA TODAY
May 25, 2010

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.
...
Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. "People are paid for being rather than for producing," he says.
And what will Obama's plan be when his unsustainable spending generates yet another fiscal crisis? Why, more big government spending of course! Never let a crisis go to waste as they say in Obama land!

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