Personal Income: Earned & Borrowed

My outlook for real GDP over the rest of this year is relatively bullish for stocks. Indeed, I’m still predicting “1500 for the 500” by the end of the year. Bears looking for something to worry about can find plenty in the latest personal income report. Wages and salaries accounted for only 50.4% of personal income during March, the lowest on record.

The gap between government social welfare spending and payroll taxes earmarked to pay for such spending widened to a record $906.3 billion (saar) during March. In other words, US economic growth is increasingly based more on government borrowing to prop up social welfare income and less on earned income. (We update these charts for subscribers to our service in our Social Welfare in America briefing book.)