Americans More Reliant On Government Spending Than Ever As Debt Deluge Continues With No End In Sight

As the national debt soars past $35 trillion, government transfers make up an increasingly large portion of American incomes as both presidential nominees have vowed not to address the most significant drivers of this increase.

Roughly 8.2% of personal incomes in the United States came from government support in 1970, a figure that more than doubled to 17.6% in 2022, according to new research conducted by the Economic Innovation Group (EIG). EIG defined government support as payments from programs like Medicare, Medicaid, Social Security, unemployment insurance, veteran benefits, Pell Grants, food assistance and COVID-19 payments, as well as tax credits.

Reliance on government transfers is concentrated in certain regions of the country, many of which overlap with the key swing states that will determine the outcome of the 2024 presidential election. About 70% of the counties in Michigan, Georgia and North Carolina are significantly reliant on government spending.

EIG defined a county as significantly reliant on government wealth transfers if safety net and social programs accounted for 25% or more of personal income. Approximately 53% of U.S. counties fit this definition in 2022, up from just around 10% in 2000 and about 1% in 1970.

In Arizona, 86% of counties rely on the federal government for a significant portion of their income, alongside 60% of counties in Pennsylvania and 70% of those in Michigan. Across Arizona, Pennsylvania and North Carolina, roughly a third of the population resides in counties heavily dependent on federal programs for income.

Both former President Donald Trump and Vice President Kamala Harris have hesitated to announce cuts to wealth transfer programs, even with an estimated federal deficit of $1.9 trillion for the 2024 fiscal year. Harris, for her part, has pledged to extend Obamacare subsidies whereas Trump has promised to end taxes on Social Security,