Zoning Out or Cashing In?

I read with interest Roger Simon's post on Americans going John Galt:

Tell all your “Objectivist” friends and the libertarian gang at Reason magazine to break out the champagne. Americans may have skipped the movie of Atlas Shrugged, nor have many read any of Ayn Rand’s works, but they have taken the author’s advice anyway and gone John Galt, quitting the work force in record numbers. According to Zero Hedge, the latest figures show the labor participation rate at 35 year low.....

The implications of this are actually terrifying. What are those nearly 92 million people doing with their time, other than sitting around depressed?. Many, of course, are on some version of welfare. Some are panhandling. We see the homeless on the streets of all our big cities. Others are moving into a shadow economy, much of it illegal (drugs, prostitution), not paying taxes on whatever they earn. It’s truly a sad situation. No wonder so many states are moving toward legalizing grass. Everyone wants to zone out.

I tend to agree with commenter "tea party doc," who says:

Many of those 92 million are working--off the grid. A friend of mine has estimated that as much as 30% of the local housing construction involving remodels here is bartered labor and cash transactions that don't show up on anyone's W-2. I would bet that when the health care bubble begins to burst there will be many home births that will never be reported to the government and we will have citizens that live their entire lives off the grid.

I do think that many people--and not just illegal immigrants--are working off the grid and collecting government benefits. This means that for many Americans, today's economy can be providing them with more spending money, not less. Those who wish to stay under the radar might even be doing better. The big problem will be for those who wish to get ahead in conventional ways, such as through college and then with a W-2 paying job. Perhaps the elite will do well as they have connections, but for everyone else this route will be tougher.

What are your thoughts?