Government is a growth industry

Shocking chart out of the New York Times:

The red line shows what share of personal income comes from wages — that is, what Americans earn from working. The blue line shows what share comes from http://cdn.apture.com/media/imgs/link_icons.gif?v12) !important; background-position: 100% -448px; background-repeat: no-repeat no-repeat !important; margin: 0px !important; border: 0px !important initial !important initial !important;"> transfer payments, which are made to individuals, usually by the federal government, through social benefit programs like unemployment insurance, disability insurance and Social Security. (Note that the two lines use different scales, shown on the vertical axes, and that the scale for wages does not start at zero.)

As you can see, the share of income that Americans earn by working has been falling, from more than two-thirds of their income in the mid-1950s to just over half of their income today. Meanwhile, they have been growing more and more dependent on money from social benefits programs, growing from about 4 percent in the mid-’50s to about 18 percent in February 2011.

As America's economy, like the rest of the planet's, undergoes a fundamanetal restructuring, and money shifts to all things digital, there should be no doubt that more and more will rely upon the government for at least short-term help. 

The biggest factor, of course, are baby boomers. There's lots of them, they have, as a group, known no lifestyle other than the best in the history of the world, and as they age they both demand (and require) more government services and are certain in their belief that they have "earned" and "paid for" these services (e.g. Medicare, Social Security).

This is false, of course, though that's not relevant. What it means is that non boomers will likewise have to throw themselves into the government mix and demand their share. Regardless of party affiliation, you should expect government, as a percentage of GDP, to continue to rise for at least another 10-20 years. Longer if the boomers hold onto life (and power) more than expected.