Saturday, February 18, 2012

Geographic Areas to Short When the Debt Bomb Goes Off

A bit of hyperbole in the headline. It's not a bomb and besides, the problem will be the interest rather than the debt per se.

I'm not sure how to use this but thank the New York Times for putting together this interactive map of the counties most dependent on Federal transfer payments,

What I'd really like to see is a list of the counties with the highest levels of Social Security Disability fraud, this is a program ripe for reform.

As Robert Samuelson wrote for the Washington post (via the Billings Gazette):
Social Security's disability program is a political quagmire — and a metaphor for why federal spending and budget deficits are so difficult to control. The numbers are too big; the details, too complicated; and the choices, when faced, too wrenching. President Barack Obama's new budget, estimated at $3.5 trillion or more, will raise all these problems. Experience suggests that little will be done to rein in long-term spending and deficits.

Social Security's disability program opens a window on this larger paralysis. Created in 1956, more than two decades after Congress authorized Social Security, the program was initially seen as a natural complement to coverage for retirees. Through sickness or accident, some workers had to retire early. They, too, deserved protection. For many years, the costs were modest. But in recent decades, they have exploded.

Consider: In 2010, Social Security's disability program cost $124 billion plus another $59 billion for Medicare (after two years, disability recipients automatically qualify for Medicare). This exceeded $1,500 for every U.S. household. For the past two decades, disability spending has increased at a 5.6 percent annual rate, compared with 2.2 percent for the rest of Social Security. As a result, disability represents nearly one in five dollars of Social Security spending, up from one in 10 in 1988.

ADA vs. disability checks
All these facts come from a fascinating paper by economist David Autor of the Massachusetts Institute of Technology. The disability program, Autor writes, is a "central component of the U.S. social safety net" but doesn't help "workers with less severe disabilities" to stay in the labor force. (By law, recipients can't be employed because disability is defined as the inability to work.) This means Social Security collides with the 1990 Americans with Disabilities Act, which aimed to keep the disabled in jobs.
Guess which prevails. One program, Social Security, pays the disabled not to work; the other, the ADA, simply encourages their work. Money wins. In 1988, 4 percent of men and 2 percent of women aged 40 to 59 received disability benefits. By 2008, the men's rate was almost 6 percent and the women's, 5 percent....MORE
FYI the guy living as an "adult baby" was cleared of fraud charges:
The California man who lives part of his life as an “adult baby” and collects Social Security disability payments says the federal agency has cleared him of wrongdoing and will continue sending checks.

Stanley Thornton Jr. now wants an apology from Sen. Tom Coburn, the Oklahoma Republican who called for the benefit review because the investigation disrupted the final months of life for his roommate Sandra Dias, who playacted as his mother, spoon-feeding him and helping him into his baby clothes until her death in July....