Thursday, March 18, 2010

Quantifying the shift to government dependence

I love lists, indices, and other interesting compilations of information. However, a recent report by the Heritage Foundation called the Index of Dependence on Government was very disturbing indeed. The numbers numbers this report certainly makes one look and they should be most alarming to even the most casual observer.

The index looks at several indicators when it comes to the growth of dependence on government. For example, how much have federal social programs grown? To what degree have such programs "crowded out" what were once social obligations and services carried out by the family, community organizations (e.g., churches), and local governments? In sum, William Beach, Director of the Center for Data Analysis at the Heritage Foundation, asks, has the civil society yielded significant ground to the public sector? After all, problems are solved by friends, neighbors, family, and religious groups, they are simply maintained when they fall into the hands of government. Quantifying the size of the shift to dependence is exactly what the index attempts to do.

The index currently stands at 240, based on data running through 2008. That is up three points from the 237 points from 2007. The growth in the index has been astonishing since 2001, growing by 31.2 percent when it stood at 183. The growth is even more profound when you look at the orgins of the indes in 1980, in which the base year for the index started at a mere 100). This enormous growth has happened over 30 years.

The rapid increase in the number of dependents has been accompanied by a comparable increase in the number of people who do not pay taxes. That number has grown from 21.3 percent in 1980 to 34 percent in 2008. 20 million tax filers did not pay a penny in taxes, 48 million Americans paid nothing at all.

Beach believes this shift to government dependence should be alarming to Americans. In addition to providing a huge financial drain on social service programs and the probability of long term dependence without consequences or shame (after all, recipients are mere "numbers" in the bureaucratic game); this harms civil society of its traditional and necessary role in providing assistance and the path towards independence through relationships that are closer to home. These include the family, community groups, religious organizations, and local governments. Local governments are far more effective than the federal government in breaking dependence because of their much more limited budgets and greater accountability, because they are closer to voters. Although the focus of the index is on the shift from society to government, this study also indicates the decay of civil society itself as reflected in its declining role in this most important area of life.

The biggest concern of all that comes from this index, in my opinion, may be what is around the corner -- the huge number of Baby Boomers that will bring the largest retirement of people in the history of the world. This phenomenon is taking place at a time when the number of people who do not pay taxes is growing rapidly. America has been on the path towards economic ruin for years. Now it seems we are in the process of fast tracking that process.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN 650). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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