U.S debt dollars are the sand our local economic castles are built on
As a child born under Reagan but raised under the Clinton administration, I can recall my father lamenting that one-day we’ll all be working for Wal-Mart or the government. Neither of those sounded like enticing options as I was planning my life’s trajectory, but a recent study by King University in my hometown of Bristol, Tennessee seems to support his theory about the alarming dependency that vast numbers of us have upon the federal government.
A recent report found that earned income accounted for 75-80 percent of an individual’s total income fifty years ago. Yet, by 2016, that ratio has dwindled to 57 percent in the Tri-Cities (Bristol, Kingsport, and Johnson City). How did this happen? The report concluded that the drastic decline can be attributed to Washington’s rapidly growing share of “government transfer payments.”
To put it simply, entitlement programs that dish out taxpayer dollars from one group of people for healthcare, welfare, and other federal benefits given to another group of people are examples of government transfer payments. As one of the report’s researchers explains, “Transfer payments constitute a basic industry, and like other basic industries, such as manufacturing, tourism, and mining.” We may not initially consider services like Medicaid or Social Security as a basic industry, but money talks and here’s what it’s telling us:
- According to the latest data, the Tri-Cities residents received nearly $5 billion in government transfer payments, 28 percent of the region’s total personal income.
- The largest share of transfer payments belonged to Medical and Social Security benefits, which accounted for 80 percent of transfer payments combined.
- Residents in the Tri-Cities received 49 cents in government transfer payments for every dollar of earned income that same year.
Unfortunately, I must admit that my father’s economic forecast over 25 years ago is proving more accurate than most Nashville meteorologists’ hourly radar predictions. We must start to stem the rising tide of entitlement programs, such as Medicaid and social welfare, and embrace market-based solutions like Direct Primary Care, reduced regulation, and implement policies such as the Right to Earn a Living Act, which remove arbitrary barriers to entry so more Tennesseans can find a job. If we want to change course, the time is now.