Thursday, October 17, 2013


Graph #1: Total Transfers as a Share of Personal Income
A pretty consistent increase.

But how do Transfers compare to Interest and Dividend income?

Graph #2: Transfers compared to Income from Assets (Interest and Dividends)
They run close, at times.

Here's a breakdown of Transfers into component parts:

Graph #3: The Various Transfers that add up to "Transfers"
The obvious high one is Social Security (blue). Note that this has been flat since 1981.

The red and yellow, Medicare and Medicaid, don't start until 1966 but increase rapidly, and by the last years of the graph might seem to be challenging the dominance of Social Security. That's probably why some predictions see Medicare and Medicaid as more of a cost problem than Social Security.

Note also the pink one, running across the bottom of the graph, Scrooge-like.

I'm wondering if Social Security isn't really also a type of Income from Assets. Bloated these days, perhaps, but no more than financial profits in the private sector.

// The Google Drive Spreadsheet for these three graphs


Greg said...

Social Security and Medicare should not be classified as transfers. They are pre paid for benefits.

This mis classification of these programs needs to stop I think as it plays right into the hands of the Chicago School types

The Arthurian said...

Hi Greg. Agreed, agreed. I was thinking something like that about SS but I was hazy on it. Didn't think of Medicare.

... Yeah, it is still part of personal income, but don't call it a transfer. Okay, what to call it?

How about in Personal Income Receipts on Assets along with interest and dividend income?

Greg said...

Medicare/SS shouldnt be classified as income at all should it? I mean, its insurance that has been paid for.
Medicare is an inkind service anyway.

The interest and principle on the bonds havent even begun to be distributed as I understand it. The accounts are still growing but at a smaller rate. Maybe Im wrong about that