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U S S A (united Socialist States Of America)

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Benefit spending soars to new high

A customer paying with a "food stamp" card at a Kroger store in Columbus, Ohio. Enrollment for food stamps hit a record 33.2 million people in March, up 5.2 million from last year.

The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans' income is now coming in the form of a federal or state check or voucher.

Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009, the Bureau of Economic Analysis reports. That's the highest percentage since the government began compiling records in 1929.

In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show. Benefits rose at a 19% annual rate in the first quarter compared to the last three months of 2008.

The recession caused about half of the increase, according to the report. Unemployment insurance nearly tripled in the past year. The other half is the result of policies enacted during President George W. Bush's first term.

Following the 2001 recession — when costs normally decline — social spending soared to pay for the Medicare drug benefit, expanded health care for children and greater use of food stamps.

The safety net is working, advocates say.

"We're not seeing the hunger we saw in the 1930s because the food stamp program is doing what it's supposed to do," says Florida food stamp director Jennifer Lange.

What's driving the $209 billion increase in benefit costs from a year ago:

•Unemployment insurance. One-fourth of the extra spending covers jobless benefits, a program started in the Depression. The stimulus law, passed in February, increased benefits.

• Social Security. The bad economy has prompted a 10%-15% jump in early retirements, the program's actuary says. A 5.8% increase took effect January 1. Bottom line: $55 billion in new costs.

• Food stamps. Enrollment hit a record 33.2 million people in March, up 5.2 million from last year. The stimulus law boosted the size of the benefit. Average March benefit: $114 per person.

"The increase in social spending is still relatively modest given the severity of the downturn," says economist Dean Baker of the liberal Center for Economic and Policy Research. "We're not France."

Adam Lerrick, economist at the conservative American Enterprise Institute, says the benefits' explosion will eventually lead to an economic crisis.

"We've seen this movie before in many countries. It always has the same ending," he says.

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The American Dream has been shown up for the nightmare it really is.

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It's very interesting & extremely enlightening to observe how the rich elite owned media has began to throw derogatory terms such as 'Socialism' at the United States, as the redistribution of wealth has began to flow somewhat towards the people instead of the rich.

When the nanny state subsidizes & bails out rich corporations & filters tax payer's money into high tech industry via the pentagon & military systems it's Capitalism & 'all's right with the world'.

As soon as it begins to flow towards the population, it's Socialism & we are headed towards Stalinist repression.

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It's beginning to look like The US has woken up belatedly and the Obama administration is using the opportunity to attempt to build a new, clean, fresh USA.

If Brown has been attempting to do the same for Britain, I don't think the message has got across.

The show moves to Germany next, where Porsche faces bankruptcy if it can't meet its June interest payments on the huge loans it took on for it's unsuccessful David and Goliath attempt to take over VW group. (source: Autocar magazine).

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