Following today's release of the latest Personal Income and Spending data, Wall Street was predictably focused on the changes in these two key series, which showed a modest slowdown in personal spending, coupled with a modest decline in personal income.
While the change in the headline data was indeed notable, what was far more remarkable was less followed data showing just how reliant on the US government the population has become.
We are referring, of course, to Personal Current Transfer payments which are essentially government sourced income such as unemployment benefits, welfare checks, and so on.
In May, this number was $4.9 trillion annualized, and while it is down from the record $6.6 trillion hit in April when the US government activated the money helicopters to avoid a total collapse of the US economy, it was nearly $2 trillion above the pre-Covid trend where transfer receipts were approximately $3.2 trillion.
Even more striking, is that as of June when total Personal Income was just below $20 trillion annualized, the government remains responsible for over a quarter of all income.
That's how creeping banana republic socialism comes at you: first slowly, then fast.
The "Good" news? As we reported last November, the US middle class won't have to suffer this pain for much longer, because while the US has one one of the highest median incomes in the entire world, with only three countries boasting a higher income, it is who gets to collect this money that is the major problem, because as the chart also shows, with just a 50% share of the population in middle-income households, the US is now in the same category as such "Banana republics" as Turkey, China and, drumroll, Russia.
While the change in the headline data was indeed notable, what was far more remarkable was less followed data showing just how reliant on the US government the population has become.
We are referring, of course, to Personal Current Transfer payments which are essentially government sourced income such as unemployment benefits, welfare checks, and so on.
In May, this number was $4.9 trillion annualized, and while it is down from the record $6.6 trillion hit in April when the US government activated the money helicopters to avoid a total collapse of the US economy, it was nearly $2 trillion above the pre-Covid trend where transfer receipts were approximately $3.2 trillion.
Even more striking, is that as of June when total Personal Income was just below $20 trillion annualized, the government remains responsible for over a quarter of all income.
That's how creeping banana republic socialism comes at you: first slowly, then fast.
The "Good" news? As we reported last November, the US middle class won't have to suffer this pain for much longer, because while the US has one one of the highest median incomes in the entire world, with only three countries boasting a higher income, it is who gets to collect this money that is the major problem, because as the chart also shows, with just a 50% share of the population in middle-income households, the US is now in the same category as such "Banana republics" as Turkey, China and, drumroll, Russia.
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