Tag Archives: disability

Why isn’t the White House concerned about record numbers of Americans getting injured?

Immigration, free cell phones for the unemployed, cuts to discretionary spending and gun control are all at the top of the President’s to-do list, but why isn’t the growing number of Americans getting injured a concern?

The Social Security Administration released new figures showing that the number of Americans on disability has increased to a new record. 8,830,026 Americans collected disability checks in January. That means that there are 13 people working for every person collecting disability.  Of course, those 13 are also supporting social security, medicare, medicaid and now free phones for the unemployed.

The real question – what on earth is disabling so many American citizens? Surely those people are actually unable to work and not just collecting a handout. So what is the government failing to do?

Is OSHA unable to keep workplace injuries under control? Is the National Transportation Safety Board becoming less able to promote traffic safety? Are we becoming clumsier as a nation?

In the late 1960’s more than 50 workers were supporting each disabled person. At the going rate, we’ll have more people disabled than actually working – clearly an epidemic of injury.

 

NASI releases misleading video on Social Security as tool for teachers

Using flawed logic, “Just the Facts”, a video released by the “National Academy of Social Insurance”, seeks to prove that Social Security Insurance and Social Security Disability Insurance are in good fiscal order.

Comparing the amount of money spent to the size of the economy, the group uses powerpoint-esque animations to help children, communities and college students understand how important and inexpensive the programs are. It’s all propaganda.

In each of the last three years (2009-2012) the Social Security Trustees have released reports showing a shorter time-horizon and larger cost to save Social Security. In 2010, the trustees said that benefits would need to be cut by 22% or taxes raised by 28% by 2037 in order to prevent insolvency. In 2011 that year changed to 2036. In the 2012 report, the trustees say that a 33% increase in taxes or 24% reduction in benefits must occur by 2033. The financial changes and the urgent dates by which they are needed are dismal and getting worse in an accelerating manner.

Social Security has been spending more than it takes in since 1985 and it will likely be generations, if ever, that it returns to surplus budgets.

Some in the media have focused on the $2.7 Trillion surplus that the Social Security Trust Fund reportedly has. Actually, it has loaned all of that money, as it must, to the general fund for Congress to spend as it sees fit. That leaves $2.7 trillion debt that the Treasury owes to Social Security. If Treasury could repay it, and it can’t, that amounts to $8,734 for each American citizen[1] – spread that over your retirement..

The video also focuses on the retirement of baby boomers, which will certainly increase the ratio of payees to payers. What they don’t mention is the rapid growth of the disabled population taking SSDI since eligibility rules were relaxes between 1984 and 1990.

Between 1984 and 1990, Congress and the S.S.A. loosened the disability requirements, especially for children and people suffering from mental disorders. The agency also agreed that it would no longer cut off recipients it thought were “no longer disabled” unless it could show that their medical condition had improved, something that is exceedingly difficult to do. [2]

According to a New York Times editors’ blog post, from 2001 to 2007, disability payments have increased 65% while medical reviews to prevent fraud have dropped more than 75%. SSDI is not going to get better if the government is going to rely on the honor system to police it.

The video is plainly misleading and is intended as a teaching tool in schools and universities as NASI states “The “Just the Facts” video is a tool for schools, colleges, community and religious organizations, and journalists to educate their students, communities, viewers and readers”. A tool for use in schools so that the myth of infinitely maintainable socialized retirement and disability can be planted in the minds of the young. The math, however, is just plain misleading.

sources:
[1] JustFacts – Social Security: http://www.justfacts.com/socialsecurity.asp#financial
[2] The Disability Mess: http://roomfordebate.blogs.nytimes.com/2009/05/07/the-disability-mess/

Obama creating a nation of lazy, good-for-nothing mooches

Finally we are able to point at something (besides record gas prices) as an accomplishment of the Obama Administration: more Americans are finding it acceptable to live off of government hand-outs than ever before.

Food stamps are being used everywhere from cruise ships to casinos. There’s even a YouTube video showing how widely-accepted EBT (food stamp) cards are for non-necessities. Now, more people than ever have turned to the government program:

The Congressional Budget Office said Thursday that 45 million people in 2011 received Supplemental Nutrition Assistance Program benefits, a 70% increase from 2007. It  said the number of people receiving the benefits, commonly known as food stamps, would continue growing until 2014.

If the economy is getting better, why the expectation that more people will be requiring food stamps? Shouldn’t this have at least leveled-off if the jobs situation has stabilized? The CBO apparently sees an economy in decline for almost another two years.

While food stamps could arguably be for those not necessarily lazy, those opting for disability instead of a job is getting out-of-hand [emphasis added]:

A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program.

The number equates to 6% of the active workforce going on disability – a record ratio. The recent rise is attributable to three things:

  1. the relaxation of eligibility standards by Congress in 1984
  2. the current Administration’s harmful economic policies
  3. a climate of acceptance of those that would choose to go on disability even though they are able to work

Having the long-term unemployed go on to Social Security Disability is certainly better for the incumbent President and Democrat Senate. It falsely lowers the unemployment rate by taking those people permanently out of the work force.

Another negative impact is that Social Security is being drained even faster by folks who would otherwise be able to work. The money for SSDI (disability insurance) comes from exactly the same place as the retirement program (SSI) according to the government’s own website:

Social Security is funded through a tax on employers, employees, and self-insured individuals. Everyone who works in the United States pays into Social Security, and a portion of these funds are allocated to Social Security’s disability benefit programs, namely, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

The relaxation of eligibility rules and Obama’s failed economy is accelerating the demise of the senior entitlement program by turning it into a permanent unemployment benefit.

Some argue that people need these benefits because of the failing economy – pretty much the same people preaching Obama’s fantastic handling of that same economy.

Rejecting FairTax Part Four: The Negative Income Tax Credit

In Part One, I’ll cover the dangers of taxing consumption as a major source of government revenue, both to the individual and to the economy.

Part Two will cover the little-known problems in the FairTax proposal- the “fine print” FairTax advocates won’t tell you about (or don’t know themselves); I’ll also refute some of the inconsistencies and rhetoric used by FairTax advocates.

Part Three will introduce the reader to the benefits of flat income taxation- why it’s superior to consumption tax, and the economic benefits of flattening the tax code.

Part Four will introduce the reader to the Negative Income Tax Credit- an ideal solution to the the problems of our massive welfare state, which can only be implemented in conjunction with an income tax system.

Part Four: The Negative Income Tax Credit

There is no doubt that our public welfare system is badly broken and in need of serious overhaul. It is far too expensive, far too lax in preventing and detecting fraud, and far too generous.

Before we can begin to address the problems with the system, we must first accurately define the three major problems with the current grant-based welfare system:

1) Those not familiar with the welfare system tend to classify welfare recipients in two groups: Those who “need it”, and those who “don’t”. This overly-simplistic concept ignores one of the major problems with our welfare system: The poverty trap.

Many government programs intended to assist working persons with insufficient incomes are established with static income limits. If a person’s income rises exceeds the limit even slightly, most or all of the assistance is lost. This creates a “welfare trap”, where people are forced to remain in a state of underemployment- turning down more work hours, promotion, or another offer of employment at a higher wage- because a small increase in wages would result in a total (or near-total) loss of benefits.

You probably know people in this position, though you may not know they recieve entitlements. Many of them are ashamed to admit it. I know people who, for example, grocery shop late at night to avoid being seen using an EBT card. These people would much rather work their way to prosperity, but can’t.

2) The welfare reforms of the 1990s eliminated one major problem with welfare benefits by imposing a work requirement. Unfortunately, it also created an exemption to this work requirement for people who are certified “disabled”. The result: A dramatic increase in the percentage of the population certified “disabled”. This added bulk of not-really-disabled people drains resources from those who are legitimately handicapped: During the same period that the “disabled” population grew, the amount of spending on programs for people with severe mental and physical impairments decreased. Public money the taxpayers believed was going to assist these people was actually being paid to freeloaders.

In order to undo this situation, we have to scrap the entire concept of “disability” from the law. I recommend a similar, but more precise term: “Helplessness“. I don’t think any small-government conservative, no matter how hardcore, really has issue with assisting those who are legitimately helpless- those whose physical or mental impairments make them unable to fend for themselves.

3) The size of the welfare bureaucracy is staggering. Approximately 750,000 federal, state, and local public employees work in our welfare system nationwide. To put this number in perspective, that’s about the number of medical doctors in the United States. The vast majority of these people work in jobs involving the movement of money and/or paperwork between government entities. It goes without saying that this obscenely large bureaucracy is enormously costly.

So how do we eliminate the poverty trap, reform disability, and shrink the enormous bureaucracy, without eliminating the social safety net?

Enter Milton Friedman, the god of libertarian economics.

Friedman’s idea for fixing this problem was to scrap the grant-based system and replace it with a single, uniform negative income tax credit. Under this system, each person would be eligible for a refundable tax credit, which would diminish fractionally for each dollar of income earned.

To illustrate this concept (the actual amounts would likely differ):

Assuming a NIT credit of $10,000 and an amortization rate of 50%:

A person who earned no income would be eligible for the full credit of $10,000;

A person who worked and earned $5,000 would have their credit reduced by 50% of this amount ($2,500), and would have a total income of $12,500 ($5,000 in wages plus $7,500 in credit);

A person who earned $12,000 would have their credit reduced by 50% (or $6,000), and would have a total income of $16,000 ($12,000 in wages plus $4,000 credit);

A person who earned $20,000 would neither pay taxes nor recieve credit, and income above $20,000 would be subject to income tax.

As you can see, this system would eliminate the welfare trap, since any increase in wages would still yield an increase in total income. It would require substantially fewer bureaucrats to administer. And it would allow funds to be targeted specifically toward the helpless- in the form of supplying facilities and equipment, such as group homes and motorized wheelchairs- rather than doling out cash, which is too prone to fraud.

It would also substantially reduce the cost to taxpayers of providing a social safety net.

It must be noted that we do have a NIT credit of sorts in use already- the Earned Income Tax Credit (EITC). Unfortunately, it’s currently just another welfare benefit. In order for a NIT system to genuinely replace the welfare grants, we’d have to convince enough well-intentioned but misguided liberal voters that it really is a better, more compassionate system; one which allows us to better serve genuinely handicapped people, and which allows working people to succeed and get off of welfare- and live with greater dignity- rather than being stuck in a system which demeans and dehumanizes them.

American Men are Lazy Because the Government Doesn’t Spend Enough..

unemployment lineIf we were to learn about enthusiasm, self-reliance and work ethic from Washington Post op-ed columnist David Brooks, we’d come to understand that American men are lazy due to no fault of their own – it’s because the government hasn’t done enough to energize them.

Brook’s opening assertion is that Americans are, by nature, energetic:

Americans have always been known for their manic dynamism. Some condemned this ambition as a grubby scrambling after money. Others saw it in loftier terms. But energy has always been the country’s saving feature.

Hard working Americans all over this great land would likely agree with this statement. Most would work themselves into the ground if the opportunity arose – as long as the reward was there. According to a statistic cited by the author, that work-ethic has been on the decline:

..in 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. One-fifth of all men in their prime working ages are not getting up and going to work.

For some reason, 20% of working-age, able-bodied males aren’t going to work.

The article continues guessing that the problem is that American men don’t have the skills necessary to work.

According to data from the Bureau of Labor Statistics, 35 percent of those without a high school diploma are out of the labor force, compared with less than 10 percent of those with a college degree.

Erroneous thinking perpetuated from the liberal ideology. Mr. Brooks has his cause and effect relationships backwards. First, a college degree is not the reason for the difference in worker participation numbers. Anyone that would work through high school and college is motivated and would most-likely be motivated to find a job – whether or not in the field of his degree. Someone that didn’t finish high school may have dropped out due to being entirely unmotivated. If that’s the case, he probably won’t try very hard to get a job – especially if there are sufficient government safety nets to allow him to be worthless.

The author’s solution to the problem: a vast array of government policies:

It will probably require a broad menu of policies attacking the problem all at once: expanding community colleges and online learning; changing the corporate tax code and labor market rules to stimulate investment; adopting German-style labor market practices like apprenticeship programs, wage subsidies and programs that extend benefits to the unemployed for six months as they start small businesses

Several of those ideas look good on the surface, but is government spending really the answer? Based on the study that Mr. Brooks cited, 96% of working-age males were working in 1954, well before the slew of government intrusions took control of so many facets of American life. Given this empirical evidence, one might instead see government hand-outs and programs as the cause of the unwillingness to work.

Quite plainly, when there was no other way to make a living other than to work, men worked. Now that Social Security disability and two years worth of unemployment are available, 20% of those that should be productive citizens have no need to be. Let’s turn off the government hand outs and see if that 96% number isn’t achieved miraculously and nearly overnight.

Unemployment Dropping as Jobless Turn to Disability Instead

The recent drops in first time unemployment claims should be great news, but it may not be. Certainly, economic news is turning south so why the positive news on unemployment figures?

The Wall Street Journal may just have the answer:

A huge wave of applicants joined the program over the past decade, boosting it from 6.6 million beneficiaries in 2000 to 10.2 million in 2010. New recipients have come from across the country, with an 85% increase in Texas over 10 years and a 69% increase in New Hampshire.[1]

It would appear that as unemployment benefits wear out or job seekers give up, they turn to Social Security Disability Insurance. State government’s may well be helping that happen as it takes the burden off of the unemployment insurance funds that they are responsible for and puts it on the Federal government, more specifically, Social Security.

Certainly the unemployed find it easier to deal with. They would no longer be required to hunt for a job in order to collect the check. If their disability is permanent, so is the check.

States have no incentive to ramp up enforcement, it’s not their money and it takes some pressure. The claimant has no reason not to do it, they get a check even though they’ve already exhausted unemployment benefits. The only people with incentive to fix it would be those paying the payroll  taxes to fund the SSDI: working people and business owners – and what can they do?

 


Sources:
[1] http://online.wsj.com/article/SB10001424052748703752404576178570674769318.html?mod=googlenews_wsj