In an economy with little or no job creation, federal disability insurance is fast becoming the new normal.
The cost of Social Security Disability Insurance has risen so sharply in recent years that its trust fund is now projected to be depleted in just three years.
The Insider Report disclosed in June 2012 that nearly 11 million Americans were then receiving disability benefits, and the program cost taxpayers $132 billion the previous year — more than the combined annual budgets of the Departments of Agriculture, Homeland Security, Commerce, Labor, Justice, and the Interior.
But the cost has risen even more since then and is estimated to reach $144 billion this year — up from an inflation-adjusted $56 billion as recently as 2000, according to a report from the Cato Institute.
A major reason for the surge in disability claims is that “Congress has expanded benefit levels over the decades, and eligibility standards have been greatly liberalized,” Cato observes. “The result is that people capable of working are instead opting for the disability rolls when confronted with employment challenges.”
This is what I mean by the “entitlement state.”
One of the things about being on Social Security Disability is that once you’re on it, you’re on it for life. The incentive is never to lose it. If you start to work again—or at least work too many hours—then you’re either accused of fraud, or you lose the benefit. Needless to say, this fosters a sense of nonproductive apathy or neurotic fear in all who touch those benefits.
Proponents of the transfer-of-wealth/entitlement state will reply, “Anyone can fall on hard times. The government is just there to help those in need.” Indeed, this is the argument of most conservatives as well as most liberals when it comes to maintaining these benefits.
Yet you are reading the numbers. The more people go on these programs, the more will stay on them. And they stay on them permanently. The less productive the economy becomes, the more people need or want to get on those benefits. It’s a vicious cycle, psychologically speaking.
Most of these people going on disability benefits would be much better off with a thriving, free-market economy. In such an economy, the growth would generally be 4-8 percent a year. Instead, we have stagnant growth (at best), for nearly 6 or 7 years now. Even before then, the growth of the economy was not what it might have been, or should have been. This is because high taxation and other factors, such as manipulation of the currency and banking system to enable the massive trillion-dollar deficit spending spree by the government, hamper the private economy. Consequently, the private marketplace delivers fewer jobs and less security, because it’s unable to do so with all the government regulation, interference and taxation.
Many of the people on Social Security Disability would prefer to have a job. They’re clinically depressed or anxious because they’re unable to find a job. The government then says, “See? You’re mentally ill and unstable. You’re unable to work.” So the disabled label is stuck on them forever.
We could argue forever about whether this or that person is truly disabled, or not. That isn’t the point. It’s not the purpose of the government to be deciding who is or isn’t disabled. It’s not the right of the government to rob from Peter to pay Paul, even if Paul is obviously disabled. Peter is welcome to help out Paul, but this is Peter’s decision—not the government’s to make for him.
When the government starts to say that a livelihood is an entitlement, these figures from Social Security disability are what you see. And they’re going to grow higher.
The growing number of people on disability claims is masking the real unemployment numbers.
As huffingtonpost.com reported last year,
Though the labor force has grown slightly since the recession began, the labor-force participation rate — meaning the percentage of work-age people actually working or looking for work — has shrunk fairly dramatically, from 66 percent to 63.8 percent, roughly the lowest it has been in nearly 30 years.
That couple of percentage points in decline represents about 5.4 million extra people out of the labor force. If those people were back in the labor force but still not working, then the unemployment rate would be much higher — roughly 11.3 percent, compared with the 8.2 percent the government reported in March .
This helps explain why things seem worse in the economy than the government figures tell us they are. More people are out of work than the government tells us, because the government does not count the people who have given up on working.
One of the reasons disability is defined so loosely by the government is that Social Security has, in practice, become a conventional welfare program. Social Security was originally sold as a way to help people save for their retirement, and then reclaim their own money when reaching a certain age. But Social Security is fast becoming the transfer-of-wealth program that the democratic socialists intend it to be.
Reports also abound that the Social Security disability trust fund is facing bankruptcy, just like the rest of the government. Obama is running the highest federal deficit since World War II, when adjusted for inflation. Sooner or later, we’re told, taxes must be raised. But taxes are already rising, and even when they rise more, they will not even put a dent in the unrestrained growth of the transfer-of-wealth state. Even a booming economy could not keep pace with unlimited demand for freebies; our lackluster economy definitely cannot do so.
The numbers simply do not work, because the economic and moral theories underlying a transfer-of-wealth/entitlement state cannot work. You cannot make a growing number of people—perhaps ultimately a majority—dependent on programs while raising taxes and placing mandates such as Obamacare on private business, and expect private business to continue to thrive and grow.
I don’t know or care what’s in Obama’s heart or mind. I know that his policies, and those of the majority in Congress, are consistent with the behaviors of those who perversely seek to make millions of citizens permanently helpless and dependent. This is not compassion and caring. It’s sickness. Obama and his ilk are turning as many Americans as possible into wards of the state. Who will keep this vast entitlement state financed and going? We’re already running a trillion-dollar deficit and multiple trillions in debt. It’s like a credit card maxed out into infinity. Where is it supposed to end, or resolve?
Like the proverbial elephant in the living room, or the fabled emperor with no clothes, people are simply not talking about these glaring contradictions. Voters have sent the message to politicians that they don’t care, or it doesn’t matter. Politicians, from Obama on down, have heard that message loud and clear.
And so the denial-fest continues …
Dr Michael Hurd
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