Economic distress fuels growing reliance on government aid
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Residents in more than half of America's counties now draw a substantial share of their total income — more than a quarter — from the government, according to an Economic Innovation Group analysis. In 2000, that was the case in just 10% of counties.
Why it matters: America's reliance on government programs has soared in the past half-century — with a stunning acceleration in the past 25 years (charted above).
- Economic distress in much of the country is driving massive social and political upheaval.
Zoom in: Three huge trends explain the massive increase in America's dependence on these programs, which include Social Security, SNAP, Medicare and Medicaid.
- An aging population: The country is evolving into an older society, and the largest social safety net programs are designed to keep seniors out of poverty. Their share of the population will only increase as the last Baby Boomers reach retirement age.
- Economic opportunity: High-paying jobs tend to be concentrated in a small number of wealthy hubs. Older, rural areas aren't faring as well: Appalachia, the tribal Southwest, the rural South and the northern Great Lakes.
- Health care: Rapidly rising health care costs make Medicare and Medicaid a larger share of their recipient's total income. Medical costs "have risen nearly twice as quickly as overall inflation over the past several decades," the report says.
Between the lines: The vast majority of counties where government support is critical are rural and overwhelmingly vote Republican, The Wall Street Journal notes.
- Many of those counties are located in key battleground states this year: Government aid makes up a significant share of income for about 70% of counties in Michigan, Georgia and North Carolina.
- That number is 60% in Pennsylvania.
Zoom out: The federal deficit has been almost entirely absent from the presidential campaign this year.
- "The country is on a collision course with politically fraught trade-offs," EIG says in the report.
- "Significantly raising taxes and dramatically cutting ... programs could choke off the very economic activity that finances [them] and immiserate the lives of people who depend on them."
