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.

Why TV May Sweat the Future

There have been numerous changes in the way people find the news, entertainment, and information they want over the last decade and most of the volatility is driven by one thing, the Internet. The Internet has required every media to innovate or become obsolete and very few traditional media maintain only one presence. Virtually everyone wants to be seen online.

Still, in spite of the best efforts to become current, television is beginning to assess its future. Recently, Mediabistro.com indicated that the ratings game is giving people a future glimpse at the long term viability of TV. It noted: "The adults 18-49 demographic remains the gold standard among advertisers -- yet TV audiences keep getting greyer. According to Nielsen's 2008-09 national universe estimates, the 55-plus age bracket is by far the fastest-growing TV audience demo -- accelerating at twice the rate of the overall TV audience."

This is very grim for TV. That demographic is usually no longer accumulating wealth, but instead preserving. They don't plan on dramatically increasing income, but trying to hold on to what they have. Advertisers worship that group that is just out of high school and up to the late 40s. They are making money and they are spending. It seems to make sense that this group will only continue to grow older and those who are behind it in age will only shrink as they become even more web savvy.

Why is this happening? Because people are finding what they want, when they want it, on the Internet. I don't need to tell you that you can find all the video you can possibly consume, audio you want to hear, and articles you need to read, online. Furthermore, you usually have absolute control of the access.

TV costs money (if you want enough channels that are worth watching) and if you want to control the times you watch programming, you have to pay extra for it (in the form of a DVR or TIVO). Increasingly, TV seems so "yesterday". In spite of its bets efforts to get more TV content on the web, most people see it limping behind the web.

Even as I prepare to give my radio show a more national presence and a TV "feel" (via video) I wouldn't even bother pursuing such if it weren't for the Internet. However, because of the Internet, the fact we own a web platform with a presence in virtually every major US city, we will have a national news program in the preferred media of the younger generations. I believe the massive shift from TV to the web will only continue.

TV won't go away, but it is going to have to continue to adapt to remain relevant.

Kevin Price's articles are found daily in national publications such as USA Today, Chicago Sun Times, and Reuters. Subscribe to his newsletter here.

Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review.

Boomers and Retirement

I was reading the Houston Chronicle this morning and there was an article from the Associated Press about how Baby Boomers (the first in that group reaching 62 this year) being anxious to retire. Increasingly, the article states, Americans are forgoing the desire to retire because they simply can't afford to do so.

There is no doubt that Americans are terrible savers. Most are not placing enough aside for a rainy day, let alone for long term time off. Furthermore, the Social Security system is a shrinking and shaky long term source of retirement dollars. In spite of these realities, I believe the paper is misleading readers when it comes to the status of Boomers.

Now my retort will be anecdotal, so I will warn you of such in advance. But I know very few in their early 60s who are even interested in retiring. When Social Security was established, very few Americans lived much longer than to 65. It was a system that would stay solvent because few would be on it very long. In the 1930s when the system was established. 65 was old.

That isn't the case any more. It is true, most people in their 60s want to do things that are different, but few are looking death and the face and few are even thinking about not working. What most are considering is a different type of work. They are thinking about retiring from one job and creating a new business. Or doing another job in addition to their primary vocation. But few are thinking about being through with work, in my experience. Baby Boomers are living longer and better than previous generations, retirement isn't an even common expression among this group.

Click the image above for a discussion from the Movers and Shakers segment of the HoustonManufacturers.com TV show on Baby Boomers.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.