US Economic Briefing: Social Welfare In America

US Economic Briefing: Social Welfare In America November 3, 16 Dr. Edward Yardeni 516-972-7683 eyardeni@ Mali Quintana 48-664-1333 aquintana@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents Personal Income Relative to GDP 1-2 Personal Income Shares 3-5 US Government Social Benefits 6 US Government Social Benefits Deficit 7 US Treasury Social Benefits Outlays 8 US Treasury FICA Receipts 9 US Treasury Social Benefits Deficit Social Benefits Per Capita 11-12 Dependency Ratios 13 PCE: Health Care 14 Medicare & Medicaid -17 Federal Trust Funds 18-19 Supplements in Compensation vs Gvt Social Benefits November 3, 16 / US Economic Briefing: Social Welfare In America www.

88 86 Figure 1. Personal Income Relative to GDP PERSONAL INCOME: TOTAL vs. EX GOVERNMENT BENEFITS PAYMENTS (percent of GDP) Q3 88 86 84 84 82 82 8 8 78 76 74 Personal Income: Total Personal Income: Excluding US Government Social Benefits to Persons 78 76 74 72 72 7 7 68 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 68 62 6 Figure 2. PERSONAL INCOME: COMPENSATION vs. WAGES & SALARIES (percent of GDP) 62 6 58 58 56 56 54 Personal Income: Compensation of Employees Q3 54 52 52 5 5 48 48 46 44 Personal Income: Wage & Salary Disbursements 46 44 42 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 42 Page 1 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

16.5.5 Figure 3. Personal Income Relative to GDP PERSONAL INCOME: SUPPLEMENTS vs. GOVERNMENT BENEFIT PAYMENTS (percent of GDP) 16.5.5 14.5 Q3 14.5 13.5 12.5 Personal Income: US Government Social Benefits to Persons Personal Income: Supplements to Wages & Salaries* 13.5 12.5 11.5 11.5.5 Q3.5 9.5 9.5 8.5 8.5 7.5 7.5 6.5 6.5 5.5 5.5 4.5 3.5 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 3.5 4.5 * Included in compensation. 7 Figure 4. PERSONAL INCOME: COMPENSATION OF EMPLOYEES WITH & WITHOUT GOVERNMENT BENEFITS (percent of GDP) Q3 7 65 65 6 Personal Income: Compensation of Employees Plus US Government Social Benefits to Persons 6 Personal Income: Compensation of Employees 55 55 5 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 5 Page 2 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

8 75 7 Figure 5. COMPENSATION OF EMPLOYEES (percent of personal income) Personal Income Shares Total Wages & Salaries 8 75 7 65 6 65 6 55 55 5 5 45 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 45 Figure 6. SUPPLEMENTS IN COMPENSATION vs. GOVERNMENT SOCIAL BENEFITS TO PERSONS (percent of personal income) Government Social Benefits Supplements to Wages & Salaries 5 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 5 Page 3 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

Figure 7. UNEARNED PERSONAL INCOME (percent of personal income) Personal Income Shares Personal Income on Assets 5 Proprietors Income (with IVA & CCadj) Plus Rental Income (with CCAdj) 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 5 Figure 8. PERSONAL PAYROLL & INCOME TAXES (percent of personal income) 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 Page 4 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

95 Figure 9. Personal Income Shares COMPENSATION OF EMPLOYEES EXCLUDING GOVERNMENT SOCIAL BENEFITS TO PERSONS (percent of compensation of employees) 95 9 9 85 85 8 8 75 75 7 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 7 9 85 Figure. US GOVERNMENT SOCIAL BENEFITS TO PERSONS & COMPENSATION OF EMPLOYEES (percent of personal income) Compensation of Employees Plus Government Social Benefits to Persons 9 85 8 8 75 75 7 7 65 Compensation of Employees 65 6 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 6 Page 5 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

3 Figure 11. US Government Social Benefits US GOVERNMENT SOCIAL BENEFITS TO PERSONS* (billion dollars, ratio scale) 3 5 5 Government Social Benefits to Persons* (saar) Federal Outlays on Social Security, Income Security, Veterans Benefits, Medicare, & Medicaid (12-month sum) 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 * Included in personal income. Source: Bureau of Economic Analysis and US Treasury. Figure 12. US GOVERNMENT SOCIAL BENEFITS TO PERSONS* (percent of personal income) 5 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 5 * Included in personal income. Page 6 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

32 28 24 16 Figure 13. US Government Social Benefits Deficit US GOVERNMENT SOCIAL BENEFITS OUTLAYS & RECEIPTS* (billion dollars, saar, ratio scale) 32 28 24 16 12 12 8 8 4 4 Government Social Benefits to Persons Contributions for Government Social Insurance plus Employer Contributions for Government Social Insurance 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 * Included in personal income. Figure 14. US GOVERNMENT SOCIAL BENEFITS DEFICIT* (billion dollars, saar) 8 8 6 6 4 4-6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 - * Government social benefits to persons less contributions for government social insurance plus employer contributions for government social insurance. Page 7 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

US Treasury Social Benefits Outlays 6 96 86 76 66 Figure. US TREASURY OUTLAYS ON SOCIAL SECURITY, INCOME SECURITY, MEDICARE (billion dollars, 12-month sum, ratio scale) 6 96 86 76 66 56 56 46 46 36 36 26 26 16 Social Security 16 Income Security Medicare Medicaid 6 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 19 Source: US Treasury. 6 65 Figure 16. US TREASURY OUTLAYS ON SOCIAL SECURITY, INCOME SECURITY, MEDICARE, & MEDICAID (percent of federal outlays) 65 55 Total excluding Medicaid Total 55 45 45 35 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 19 Source: US Treasury. 35 Page 8 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

US Treasury FICA Receipts 118 11 6 94 88 8 Figure 17. US TREASURY SOCIAL INSURANCE AND RETIREMENT RECEIPTS (billion dollars, 12-month sum, ratio scale) 118 11 6 94 88 8 76 76 7 7 64 64 58 58 5 5 46 46 4 4 34 34 28 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 Source: US Treasury Department, Summary of Receipts by Source, and Outlays by Function of the US Government, Table 9. 28 18 16 14 12 8 6 4 2-2 -4-6 -8 Figure 18. US TREASURY SOCIAL INSURANCE AND RETIREMENT RECEIPTS (yearly percent change in 12-month average) 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 Source: US Treasury Department, Summary of Receipts by Source, and Outlays by Function of the US Government, Table 9. 18 16 14 12 8 6 4 2-2 -4-6 -8 Page 9 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

US Treasury Social Benefits Deficit 165 145 Figure 19. US FEDERAL GOVERNMENT SOCIAL BENEFITS RECEIPTS & OUTLAYS (billion dollars, 12-month sum, ratio scale) 165 145 1 1 5 Social Security and Medicare Payments 5 85 Social Insurance and Retirement Receipts 85 65 65 45 45 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 19 Source: US Treasury Department. 5 45 4 35 3 5-5 - Figure. US FEDERAL GOVERNMENT SOCIAL BENEFITS DEFICIT* (billion dollars, 12-month sum) 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 19 5 45 4 35 3 5-5 - * Social Security and Medicare payments less social insurance and retirement receipts. Source: US Treasury Department, Summary of Receipts by Source, and Outlays by Function of the US Government, Table 9. Page / November 3, 16 / US Economic Briefing: Social Welfare In America www.

5 48 46 44 42 4 38 36 34 32 3 28 26 24 22 18 16 14 12 WORKING-AGE POPULATION* (millions, nsa) Figure 21. Social Benefits Per Capita Civilian Noninstitutional Population: 65 & Older 48 5 52 54 56 58 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 12 14 16 18 5 48 46 44 42 4 38 36 34 32 3 28 26 24 22 18 16 14 12 * Civilian noninstitutional population. Source: Bureau of Labor Statistics. 18 Figure 22. US TREASURY OUTLAYS ON SOCIAL SECURITY & MEDICARE DIVIDED BY POPULATION 65 & OVER (thousand dollars) 18 16 16 14 Social Security Outlays Per Senior Citizen 14 12 12 8 8 6 6 4 Medicare Outlays Per Senior Citizen 4 2 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 Source: US Department of Commerce, Bureau of the Census and US Treasury Department. 2 Page 11 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

5 45 4 Figure 23. Social Benefits Per Capita US TREASURY OUTLAYS ON SOCIAL SECURITY PLUS MEDICARE DIVIDED BY POPULATION 65 & OVER (ratio scale) 5 45 4 35 35 3 Civilian Noninstitutional Population: 65 & Older (millions) 3 Social Security & Medicare Outlays Per Senior Citizen (12-month sum, thousand dollars) 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 Source: US Department of Commerce, Bureau of the Census, Bureau of Labor Statistics, and US Treasury Department. 9 Figure 24. RESIDENT POPULATION PROJECTION: 65 & OLDER (millions) 9 8 8 7 Actual Forecast 7 6 6 5 5 4 4 3 1995 5 3 35 4 45 5 3 Source: US Department Commerce, Bureau of the Census. Page 12 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

Figure. US RESIDENT POPULATION PROJECTION: 65 & OLDER DIVIDED BY TOTAL POPULATION (percent) Dependency Ratios Actual Forecast 1995 5 3 35 4 Source: US Department Commerce, Bureau of the Census. 45 5 34 32 Figure 26. US POPULATION 65 & OVER (percent) 34 32 3 3 28 28 26 26 24 24 22 18 As a Percent of: Total Population* (19.1) Labor Force (3.4) Payroll Employment (33.5) 22 18 16 16 14 8 81 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 19 14 * Civilian noninstitutional populuation. Source: US Department Commerce, Bureau of the Census. Page 13 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

PCE: Health Care Figure 27. 2 PERSONAL CONSUMPTION: HEALTH CARE GOODS & SERVICES (billion dollars, 12-month sum, ratio scale) 2 18 16 Health Care Services 18 16 14 14 8 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 8 44 39 34 29 Prescription Drugs 24 44 39 34 29 24 19 19 14 14 9 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 9 27 23 2 19 17 Total 27 23 2 19 17 13 13 1 1 9 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 9 Page 14 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

6 5 Figure 28. Medicare & Medicaid US FEDERAL GOVERNMENT OUTLAYS ON MEDICARE & MEDICAID (billion dollars, 12-month sum, ratio scale) 6 5 4 Medicare 4 3 Medicaid 3 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 Source: US Treasury Department. 145 135 1 1 5 95 85 75 Figure 29. US GOVERNMENT OUTLAYS ON MEDICARE & MEDICAID vs PRIVATE OUTLAYS ON HEALTH CARE (billion dollars, 12-month sum, ratio scale) 145 135 1 1 5 95 85 75 65 65 55 55 45 Medicare Plus 2x Federal Medicaid Private Outlays* 45 35 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 18 35 * Personal consumption on health care services plus prescription drugs minus federal outlays on Medicare plus 2x Federal Medicaid. Source: US Treasury Department. Page / November 3, 16 / US Economic Briefing: Social Welfare In America www.

Medicare & Medicaid 55 Figure 3. US GOVERNMENT OUTLAYS ON MEDICARE & MEDICAID (as a percent of total health care spending) 55 5 Medicare (12-month sum) Plus 2x Medicaid (12-month-sum)/PCE Health Care Services plus Prescription Drugs (12-month sum) 5 45 45 4 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury Department and Bureau of Economic Analysis. 4 Figure 31. US GOVERNMENT & PRIVATE OUTLAYS ON MEDICARE & MEDICAID (yearly percent change) PCE Health Care Services plus Prescription Drugs (12-month sum) Minus Medicare (12-month sum) Plus Medicaid 2x (12-month sum Medicaid) 5 5-5 Medicare (12-month sum) Plus Medicaid 2x (12-month sum Medicaid) -5-1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury Department. - Page 16 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

Figure 32. US GOVERNMENT MEDICARE & MEDICAID (yearly percent change) Medicare & Medicaid Medicare Plus 2x Federal Medicaid 5 5-5 -5-1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury Department. - 35 3 Figure 33. US FEDERAL GOVERNMENT OUTLAYS ON MEDICARE & MEDICAID (yearly percent change) 35 3 Medicare Medicaid 5 5-5 -5 - - - - 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury Department. - - Page 17 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

3 Figure 34. US FEDERAL GOVERNMENT TRUST FUNDS (billion dollars) Federal Trust Funds 3 5 Federal Old-Age and Survivors Insurance Trust Fund Federal Hospital Insurance Trust Fund Federal Disability Insurance Trust Fund 5 1998 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury Department, Detail Of Treasury Securities Outstanding, Table III. Figure 35. US FEDERAL GOVERNMENT TRUST FUNDS (billion dollars, yearly change) 5 Federal Old-Age and Survivors Insurance Trust Fund Federal Hospital Insurance Trust Fund Federal Disability Insurance Trust Fund 5-5 1998 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury Department, Detail Of Treasury Securities Outstanding, Table III. -5 Page 18 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

5 Federal Trust Funds Figure 36. 55 US FEDERAL GOVERNMENT PUBLIC DEBT OUTSTANDING: NONMARKETABLE (billions of dollars) 55 5 45 Intergovernmental Held Treasury Securities Outstanding: Nonmarketable 45 4 4 35 35 3 3 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury. 5 Figure 37. US FEDERAL GOVERNMENT PUBLIC DEBT OUTSTANDING: NONMARKETABLE (billions of dollars, yearly change) 5 4 4 3 3 Intergovernmental Held Treasury Securities Outstanding: Nonmarketable - 2 3 4 5 6 7 8 9 11 12 13 14 16 17 Source: US Treasury. - Page 19 / November 3, 16 / US Economic Briefing: Social Welfare In America www.

35 Supplements in Compensation vs Gvt Social Benefits Figure 38. SUPPLEMENTS IN COMPENSATION vs GOVERNMENT SOCIAL BENEFITS TO PERSONS (percent of personal income) 35 3 3 Government Social Benefits + Supplements to Wages & Salaries 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 Page / November 3, 16 / US Economic Briefing: Social Welfare In America www.

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