Increasing Dependence on Government Aid in the US

Government Aid Reliance on the Rise

There has been a significant increase in the number of counties in the US that are dependent on government aid. This information is presented alongside political party affiliation in the lead chart. The Wall Street Journal has published an insightful report on this growing reliance over time.

Government support programs such as Social Security, Medicare, and Medicaid are driving the increase in Americans' dependence on government aid. This support is crucial in economically stressed communities across the US, many of which lean towards the Republican party and are concentrated in swing states that are key in determining the outcome of the presidential election. Both political parties have little motivation to reduce spending.

Reasons for the Growth

The dramatic growth in government aid reliance can be attributed to a few key factors. A larger proportion of Americans are now seniors, and their healthcare costs have increased. Additionally, many communities have experienced economic decline due to challenges such as the loss of manufacturing. This has resulted in government money making up a larger portion of people's income in these areas.

This spending contributes significantly to the national debt. However, both of the presidential candidates for this year, Democrat Kamala Harris and Republican Donald Trump, have not proposed any significant measures to curb it. Instead, they have proposed plans that would increase costs. Trump plans to eliminate taxes on Social Security benefits, while Harris aims to expand the Earned Income Tax Credit for lower-income workers and extend Affordable Care Act subsidies that are set to expire, among other proposals.

Dependence by the Numbers

Even though counties significantly reliant on government spending tend to be small, they still house nearly 22% of the US population. In 2000, there were approximately 300 counties dependent on government assistance. This number has now risen to nearly 2,000.

Dependence in Battleground States

Many counties that heavily rely on government safety-net and social-program money share a common characteristic: they are located in the battleground states that will determine the outcome of the presidential election. About 70% of counties in Michigan, Georgia, and North Carolina are significantly reliant on government income. Nearly 60% of counties in Pennsylvania and 13 out of 15 counties in Arizona are also heavily reliant on safety-net income.

More than 44% of Michigan residents live in counties that are significantly reliant on government programs. In Arizona, Pennsylvania, and North Carolina, over a third of the populations live in such counties. Spending on these programs has surpassed the income people earn from other sources, according to an analysis by the Economic Innovation Group. Furthermore, the pressure from an aging population is not expected to ease: by 2060, nearly a quarter of the US population will be at least 65, as projected by the Census Bureau.

Impact of Tariffs

President Trump believes that tariffs will help, but the only effect they will have is to raise prices. For a discussion on this topic, please refer to the article "Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check".

Bottom Line

The growing dependence on government aid in the US is a complex issue with many contributing factors. The impact of this trend on the economy, national debt, and the upcoming presidential election is significant. What are your thoughts on this matter? Do you think there are viable solutions to reduce this dependence? Share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.