Of all government assistance payments in 2022, 56 percent went to the elderly, mostly for Medicare, the report stated.
Payments from the government have become the fastest-growing source of income for Americans, according to a new study.
A report by the Economic Innovation Group (EIG), a public policy research organization, titled “The Great Transfer-mation,” states that Americans have become substantially more dependent on government support, with the share of national income coming from transfer payments more than doubling over the past 50 years.
Transfer payment programs include Medicare, Medicaid, Social Security, unemployment and disability, food stamps, and veterans’ benefits.
Transfer payments increased from 8 percent of U.S. total income in 1970 to 18 percent today, the report states, crowding out private income from wages and investments.
“There is a large range of experiences driving transfer reliance across communities,” Benjamin Glasner, EIG economist and one of the report’s authors, told The Epoch Times. “But it’s unavoidable to look at the fact that transfer reliance has grown rapidly across the country, and it’s something we need to deal with.”
According to Federal Reserve data, government transfer payments increased from about $70 billion in 1970 to more than $6 trillion in 2020, during the COVID-19 pandemic, before falling back to the current level of $4.3 trillion. According to the EIG report, if government transfer payments were spread evenly among all Americans, they would have amounted to an annual payment of $11,500 per person in 2022.
One factor driving much of the shift from private income to government dependence is that the U.S. population is, on average, getting older. According to demographic data from USAfacts, the percentage of Americans 65 years and older increased from 13.1 percent of the population in 2010 to 17.3 percent in 2022. During the same period, the percentage of Americans under the age of 20 fell from 26.9 percent to 24.4 percent.
“The primary driver that we found in our report is demographic related, specifically the fact that the country has aged so rapidly,” Glasner said. “And the transfer programs that target that aging population also have grown significantly more expensive over time.”
