It is a good thing when, generally speaking, household incomes increase, as that helps people to buy more things, save more, and just live better. Money does not solve all of a man’s problems, but it gives him the means to translate the work necessary for an action or result to happen much faster than without it. Money is a very useful thing, and while it can do bad things, it is also able to do good things.
I often talk about economic data and how there are tremendous problems, and this is true. However, this problem has now spread to income, as last year, household income has risen the most since the 1930s, and it was not because of a ‘recovery’, but because of government stimulus checks.
Americans earned an additional $1.1 trillion last year — the most ever in data dating back to 1930 — thanks entirely to stimulus checks and other government aid.
Total U.S. personal income rose 6.1% last year to $19.7 trillion as a surge in pandemic-era aid outpaced gains in wages, property values and other sources of wealth, according to the U.S. Bureau of Economic Analysis.
The dollar amount of so-called transfer receipts, which include Covid relief payments, steered income growth in 26 states while increases in other types of personal income led in 25 including the District of Columbia, the preliminary estimates show.
The report illustrates how important government relief programs have been in helping to shore up Americans’ finances as the world’s largest economy recovers from the pandemic. On top of stimulus checks, an additional $498 billion was doled out in state unemployment benefits last year, according to the data.
Personal income growth ranged from 8.4% in Arizona and Montana to 2.4% in Wyoming. Gains were strongest in the West.
For the nation, wages increased 0.3% in 2020, the smallest gain since 2009. Northeastern and Midwestern states that have experienced industrial declines saw the sharpest declines in wages last year.
In the final three months of 2020, after the expiration of some government aid, incomes decreased 6.8% at an annual rate after decreasing 11.3% in the third quarter. Coastal states suffered the most. (source)
Mass welfare. That is the reason why household incomes rose.
Think about that for a minute, and ponder how serious it is, that the national income rose the most it has in almost a century because the government has been giving money to people. In a true sense, the government is not really ‘giving’ money, but is printing money borrowed from the Federal Reserve Bank that is created out of nothing except by strict fiat.
It has been said by many, and I have said it too, but I will say it again, and that is that prosperity does not come from printing. It comes from exchange, from the fruits of labor. It does not come from willing money into existence and giving it out, because the value of the money is based on either its intrinsic value or the intrinsic value it represents. If the thing that supports the dollar is the credit of the US, which is a joke, then printing more money (be it by paper or electronically) devalues the dollar. Price increases are NOT INFLATION, but the reason why inflation is so often used and re-defined is because it is attempting to confuse people by conflating an increase in prices due to high levels of consumption (and thus driving the mythos of ‘perpetual growth’ that has dominated the post world war II world) with the actual currency devaluation that can lead to hyperinflation. This phenomenon is not American, but a universal thing that transcends all cultures.
Income did rise, but it also went down. Why? Because the amount of money that one has may have increased, and the percent too, but the value of the money itself is collapsing. This is the real danger, and it is why prices are going to continue to increase and people will get poorer no matter how much money is thrown at them. The only way to solve the problem is to get rid of the debts and clear out the debt cycles that are overburdened and unpayable at this point. There likely will be a day of reckoning, but the history of spending shows that it will likely continue until there is nothing more to do and like in other civilizations, they system collapses on itself.
But until then, just like what Blink-182 did in “The Rock Show” music video, its time to throw money randomly around on the street, because that is about what fiscal policy has come to at this point in history.
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