A strange and disturbing new social pattern is unfolding before our eyes in America today: growing dependence on government handouts in the face of declining unemployment rates. Though we are now preparing to enter into the fourth year of recovery from our Great Recession, the roster of Americans seeking and obtaining entitlement benefits from our government just seems to keep on going up.
This is not the way the world is supposed to work-even if you are hopelessly infatuated with Keynesianism. Cheerleaders for Keynesianism, of course, take it as a tenet of their faith that the government should be spending aggressively during economic downturns. (To their way of thinking, the social welfare state should be one of the main vehicles for such expenditures: not only to provide a safety net, but to stimulate upswing by making up for insufficient macroeconomic demand.)
Yet to the finely calibrated Keynesian mind, government spending is supposed to be counter-cyclical: meaning that as things get better, the hand of the state is supposed to recede from economic life…
Yes, it is true that our ‘recovery’ in the aftermath of the Great Recession has been miserably weak; yes, it is true that there are other ways to measure employment prospects besides the unemployment rate; yes, it is true that the effects of poverty can linger on after an unemployed job-seeker finds new work.
But neither these qualifications nor any others should obscure this basic truth: the old counter-cyclical relationship between the unemployment rate and dependence on government entitlement transfers has apparently broken down. In good times or bad, evidently, America’s dependence on government largesse is now always on its way up.