Mainstream news headlines can be misleading.
Recent stories have claimed that half of all U.S. households are receiving government benefits, a figure which includes Social Security beneficiaries and those receiving military and civil service pensions.
Excluding those households and without considering unemployment benefits, Census Bureau data shows that only 30 percent are receiving payments that are more commonly thought of as government benefits.
Younger Americans are more likely to be receiving means-tested cash assistance, food stamps, Medicaid, or public housing. More than one-third of households headed by someone who is 18 to 24 years old get government benefits, and that number declines only slightly to 31.8 percent among 25 to 34 year olds.
The downward trend continues as the head of the households ages with less than 19 percent of senior citizens getting assistance beyond Social Security.
Several noted pundits have associated the rise in public assistance with generational attitude shifts. Younger people are less likely to have any degree of shame associated with receiving the benefits while previous generations of Americans worked through their problems without money from the government. The age of recipients on public assistance supports that theory.
While the mainstream media headlines overstate the number of households receiving traditional government assistance, the headline does accurately reflect that half of the country is working to pay taxes that are used to support the other half.
This trend could lead to a permanently lower percentage of Americans working, lower national productivity, and higher taxes on the few who remain in the work force.
These factors could lead to lower returns on investments since stock market appreciation relies on an expanding economy. Interest rates could remain low as the economy remains perpetually on the verge of recession. Unfortunately for those on the dole, these trends can't continue and eventually some people under 35 may need to work more.
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