1.Slide 1: Main Points Income Redistribution Increasing share of government spending istransferring income from current or futuretaxpayers to the jobless. Government Dependency Hit record high. Will ever return to normal level? Nothing Helps Like Jobs Joblessness impacts government spending. It isnot so clear that the reverse is true.

2. Slide 2: Employment Ra1o 66% 64% share of working age popula1on 10.5 million jobs 62% 60% 58% shaded areas denote recession 56% 1990 1995 2000 2005 2010 Source: Bureau of Labor Sta8s8cs Produced by Keith Hall , Mercatus Center at George Mason University. 3. Slide 3: Unemployment Impact on GovernmentThree types of effects:1. Slower growth of income slows tax revenue2. Government spending on unemployedIncreases3. Government spending on low-incomefamilies increases 4. Slide 4: Loss of Na1onal Income $18 $16 $14 Poten8al GDP trillions of 2012 dollars $12 GDP $10 $8 Loss = $1 trillion/year $6 $4 $2 shaded areas denote recession $0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis, Congressional Budget Oce Produced by Keith Hall , Mercatus Center at George Mason University. 5. Slide 5: Current Govt Receipts & Expenditures (share of GDP) 40% 35% 30% 25% Percent 20% Current expenditures 15% Current receipts 10% shaded areas denote recession 5% 0% 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis, Produced by Keith Hall , Mercatus Center at George Mason University. 6. Slide 6: How Does GovernmentSpending Enter Into GDP?Four Main Types of Government Spending1. *Government Consumption (46%)2. *Government Investment (8%)3. Transfer Payments (43%)4. Interest Payments (8%)*part of GDP 7. Slide 7: Federal GovernmentSpending and GDP Four Main Types of Government Spending 1. *Government Consumption (27%) 2. *Government Investment (4%) 3. Grants-In-Aid to S&L Govt (12%) 4. Other Transfer Payments (47%) 5. Interest Payments (8%) 8. Slide 8: Government Spending by Type (share of GDP) 25% 19.5% of GDP in 2012 20% Consump8on & Gross Investment Social Benets 15% percent Interest Payments 10% 5% shaded areas denote recession 0% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis Produced by Keith Hall , Mercatus Center at George Mason University. 9. Slide 9: Changing Role of Federal Government (share of GDP) 15% Consump8on & Gross Investment Social Benets Interest Payments Grants-in-aid to state and local governments 10% percent 5% shaded areas denote recession 0% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis Produced by Keith Hall , Mercatus Center at George Mason University. 10. Slide 10: Rise of Dependency Social Benet as Share of Personal Income 20% 18% 16% 14% 12% percent 10% 8% 6% 4% 2% shaded areas denote recession 0% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis Produced by Keith Hall , Mercatus Center at George Mason University. 11. Slide 11: Receipt of Social Benets by Type 15% shaded areas denote recession Unemployment Compensa8on Other Social Benets Means Tested Spending (approximate) share of personal income 10% 5% 0% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis Produced by Keith Hall , Mercatus Center at George Mason University. 12. Slide 12: Programs Targeting theUnemployed1. Unemployment Insurance Unemployment Compensation Trade Adjustment Assistance Disaster Unemployment Assistance2. Healthcare Assistance Health Coverage Tax Credit Consolidated Omnibus Budget Reconciliation Act of1985 (COBRA)3. Job Search and Training Assistance Workforce Investment Act of 1998 Wagner-Peyser Act of 1933 13. Slide 13: Unemployment Compensa1on $180 $160 $140 billlions of current dollars Emergency $120 Other $100 $80 $60 shaded areas denote recession $40 $20 $0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis Produced by Keith Hall , Mercatus Center at George Mason University. 14. Slide 14: Means-Tested Programs Low income, available regardless of employment status 126 different federal programs Largest programs (billions) o Medicaid $417.3 o Supplemental Nutri8onal Asst Program (SNAP) $74.6 o Supplemental Security Income $52.6 o Earned Income Tax Credit -- $56.6 o Child Tax Credit $28.3 o Federal Pell Grants - $41 o Temporary Assistance for Needy Families (TANF) $21 15. Slide 15: Trends in Social Benets and the Jobless Rate 25% 50% share of working age popula1on 20% 45% share of personal income 15% 40% 10% 35% Social Benets 5% Jobless Rate (right axis) 30% shaded areas denote recession 0% 25% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Bureau of Economic Analysis, Bureau of Labor Sta8s8cs Produced by Keith Hall , Mercatus Center at George Mason University. 16. Slide 16: Trends in the Poverty and Jobless Rates 25% 50% share of working age popula1on 20% 45% share of popula1on 15% 40% 10% 35% Poverty Rate 5% 30% Jobless Rate (right axis) 0% 25% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Census Bureau, Bureau of Labor Sta8s8cs Produced by Keith Hall , Mercatus Center at George Mason University.