The report is a bit hyperventilating, but it is essentially non-news. Social Security is a transfer payment not (exactly) a handout, and unemployment insurance is (arguably) delayed compensation. But it is true that none of these wages are going to currently productive people.
But with the baby boomers now entering retirement, we are going to see larger and larger transfers from the productive, to the non-productive side of the economy.
Even if you keep people working until they are 80, how much productive are you really going to get out of most 80 year olds?
Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase...[as the majority of boomers enter retirement].
Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data. from John Melloy, Welfare State: Handouts Make Up One-Third of U.S. Wages, CNBC Fast Money, March 8, 2011. ht MR.
That much our growth has been in low growth in productivity areas such as medical and government sectors of the economy, it is fairly obvious that we are going to have productively problems as our work force participation continues to shrink.
ed note-In case anyone is curious, I am aware that the formating on these posts is often a bit skewed. I do my best to fix them, but blogger often has a mind of its own.