2009: Government Handouts Higher than Tax Intake

Without welfare, unemployment and tax cuts last year, the income of Americans would have plunged to $723 billion. As it was, with the government cushioning the blow, it dropped to $167 billion. The handouts in 2009 meant that for the first time since the Great Depression, Americans took more aid from the government than they paid in taxes. "Governmental support was critical in keeping the economy, particularly consumer spending, from completely collapsing during the crisis," said Harm Bandholz, an economist at Unicredit Markets. Like other analysts, he believes that the bulk of the small economic rebound we experienced last year was a result of government spending rather than real growth. Since the goverment had to borrow to prop up the economy, it is only a matter of time before the well runs dry and we inevitably experience the second shoe drop, which many say should have occurred from the outset of the crisis.