September 3, 2012
What is monumentally new about the American state today is the vast empire of entitlement payments that it protects, manages and finances. Within living memory, the federal government has become an entitlements machine. As a day-to-day operation, it devotes more attention and resources to the public transfer of money, goods and services to individual citizens than to any other objective, spending more than for all other ends combined.
The growth of entitlement payments over the past half-century has been breathtaking. In 1960, U.S. government transfers to individuals totaled about $24 billion in current dollars, according to the Bureau of Economic Analysis. By 2010 that total was almost 100 times as large. Even after adjusting for inflation and population growth, entitlement transfers to individuals have grown 727% over the past half-century, rising at an average rate of about 4% a year.
In 2010 alone, government at all levels oversaw a transfer of over $2.2 trillion in money, goods and services. The burden of these entitlements came to slightly more than $7,200 for every person in America. Scaled against a notional family of four, the average entitlements burden for that year alone approached $29,000.
A half-century of unfettered expansion of entitlement outlays has completely inverted the priorities, structure and functions of federal administration as these were understood by all previous generations.
It is not only financial capital that is distorted by this, but moral and social capital as well.
ANOTHER UPDATE: Reader Tim Turner writes: “This article is a great start on the current state of our national finances. It is too bad that they did not finish the accounting by noting that these transfer payments consume 100% of federal tax revenues, leaving nothing at all to pay for any of the actually legitimate functions of government.”