Americans are more dependent on the federal government than ever before. According to a recent article in USA Today, 18.3 percent of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Much of this increase has come since 2008, mainly due to the expansion of healthcare and federal programs generally. Americans got an average of $7,427 in benefits last year, up from $4,763 in 2000. USA Today even breaks the data out by state, with New York leading the list.
This makes me sick.
Living off the government is not the American Dream. Americans settled the Wild West, helped win two world wars, and put a man on the moon. Immigrants have long sought the opportunity in America to make something of their lives through hard work. They didn't come to the United States looking for a handout. Americans have always dreamed big, tackled the impossible, and taken big risks in the hopes of receiving a big return on investment. Our country was built by risk takers, not rent seekers.
Have Americans gotten lazy? Has the government become too generous? Is this kind of behavior leading to our dependency on Uncle Sam? Will this kill the American Dream?
These are impossible questions to answer, but this research does highlight a really scary emerging trend. A culture that depends on the government will stifle innovation and lead to less risk-taking by those who grow our economy -- entrepreneurs. American entrepreneurs are self-made, not made by the government. Government doesn't create jobs, entrepreneurs do. How will our economy emerge from the current stagnation if entrepreneurs don't create new companies?
This death of the American Dream also could have an impact on the state of our government itself. When the American people cast their ballots for hope and change in 2008, the same year that USA Today says our benefits began this dramatic increase, they voted for more government. Ben Franklin, one of our Founding Fathers said, "When the people find that they can vote themselves money, that will herald the end of the republic."
I have a more optimistic view of the United States. I think entrepreneurs will lead us to economic recovery and create the innovations and jobs that will reduce this dependence on our Federal government. Though the battles over the budget and raising the debt ceiling will continue in Washington over the summer, I remain hopeful that we can grow our way out of this current slump, rather than spend our way out. Entrepreneurs are the key to this recovery.
What do you think?
Read more of The Startup Economy:
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- How Many Entrepreneurs Does It Take to Increase GDP?