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 record jump in personal spending (to be expected one month after the savings rate in the US hit a whopping 32% annualized), and a record drop in personal income (as government benefits and stimulus checks slowed substantially).
But 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 and emergency benefits, welfare checks, and so on. In May, this number was $5.3 trillion annualized, following the record $6.4 trillion hit last month when the US government activated the money helicopters to avoid a total collapse of the US economy.Eve more striking, is that as of May when total Personal Income was just shy of $20 trillion annualized, the government is now responsible for over a quarter of all income….
This is very very bad. Main street is becoming wall street through its US subsidiary, the federal government. The economy is becoming more brittle (less resilient) with each consolidation. And dependency means control. Economic control is how death squads are organized in the 3rd world. People will do anything to eat.