Growing Disability Claims Threaten US Financial Stability
Posted by Steve Markowitz on July 19, 2013
Given the problems in the Middle East, the Edward Snowden case, and of course the George Zimmerman trial, there has been little “space” left in the news for more mundane items such as economics and the economy.
We do not have to go back too many months to recall when there was serious concern over Europe’s sovereign debt, America’s deficits and the US sequestration spending cuts. However, ignoring these issues does not indicate that the problems are resolved.
Michael Boskin, a Stanford University economics professor published an op-ed in the Wall Street Journal titled The 2016 Disability Insurance Time Bomb concerning the serious problem of America’s growing disability liability. Boskin states:
- In 1970 less than 3 million Americans collected disability payments from Social Security’s disability insurance program. Today that number is nearly 11 million.
- In 2012 the disability payments cost $140 billion, increasing eight times (adjusted for inflation) from 1970.
- While the number of people receiving disability payments has skyrocketed, physically taxing jobs such as manufacturing, mining and agriculture have declined between one-third and three-fourths since 1970.
- Boskin reports that the Social Security’s Disability Insurance Fund will run out of money by 2016 without significant changes or increases in taxes.
- In the past 12 months approximately 1,000,000 newly disabled workers were added to the program. This alone represents approximately a $300 billion total cost for these recipients’ benefits.
Boskin concludes that the number of people receiving disability has skyrocketed in part because of changes in the law made in 1984 by Congress that significantly broaden those eligible including back pain, arthritis, and increased mental illness coverage. In addition, the government does not adequately supervise those receiving benefits. As an example, in 2009 less than 1% of those on disability went back into the workforce or gave up benefits. Disability insurance is being viewed in many cases an extension of other government and nongovernmental benefits.
States have also taken advantage of the federal government’s disability program. Many shift their citizens from Medicaid and welfare onto disability insurance or Medicare, both of which are paid for by the federal government.
Social Security disability payments is another unfunded liability placed on future Americans. Unlike the Greatest Generation that returned from World War II and created an economy that allowed their children to prosper, those children, the Baby Boomers, are stealing from their children and future generations so that they can live more comfortably today. Narcissism and greed is an insidious affliction of society. It will be interesting to see the reaction of younger Americans when they finally figure out what the Baby Boomers have done to their country and future.
This entry was posted on July 19, 2013 at 9:31 PM and is filed under Government Handouts, Government Waste. Tagged: benefits, Deficit, disability, security, social. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.