By Susan Brinkmann, OCDS
Staff Journalist

The latest analysis of government data reveals that during the first quarter of 2010, paychecks from private businesses shrank to the lowest levels in U.S. history while government provided benefits rose to record highs, which means the redistribution of wealth favored by the Obama Administration has already arrived in the U.S.

USA TODAY reports that the recession with its high unemployment rate combined with the federal stimulus program, has resulted in a major shift in the source of personal income from private wages to government programs.

During the first three months of this year, private wages plunged to a record low of 41.9 percent of the nation’s personal income, down from 44.6 percent when the recession officially began in 2007.

At the same time, individuals receiving government assistance from entitlement programs such as Social Security, food stamps and unemployment rose from 14.2 percent in 2007 to 17.9 percent by the first quarter of this year.

The trend is not sustainable, said University of Michigan economist Donald Grimes to USA TODAY. The reason is because the government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says.

 Without wages, government programs run out of money. The results can be disastrous, such as what the world is watching unfold in Greece where government plans to cut its bankrupt entitlement programs have caused rioting in the streets.

Economist David Henderson of the conservative Hoover Institute said a shift from private wages to government benefits saps the economy of dynamism. “People are paid for being rather than for producing,” he says.

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