The Purpose of This Bl;og

By and large, liberals are very decent, kind, and compassionate people who genuinely want what is best. This should be kept in mind as we explore the Law of Unintended Negative Consequences near invariably resulting from Leftist big-hearted solutions to societal problems.

Friday, July 5, 2013

Obamanomics--Disability Claims

As mentioned  in the Leftist LUNC on Unemployment, Jobs, and Workforce, as well as in the intro to Obomanomic on Trickle-up Poverty, the President and his liberal supporters have had the commendable intent of getting Americans back to work and the economy growing. Who would argue with that?

However, rather than employing more people, disability awards have spiked by 10% in 2009 over the previous year.(See HERE) And, during the first six months of 2012, more people applied for disability benefits than the entire year for 1998--"the number of workers on disability has climbed by more than 1.1 million since June 2009, a 15 percent increase."(See HERE)

In terms of hard numbers, during Bush's first term, more than 3 million people were awarded disability benefits as compared with more than 4 million during Obama's first term. This is a difference of more than 1 million people (33% increase). (See HERE

Granted, the number of awards granted has actually decreased in the last two years, where before they had been steadily climbing, including during the Bush years. (ibid) And, the proportion of awards to applicants was lower during the Obama administration than with Bush (average of 42% for Bush compared with only 35% for Obama), which suggests that the Obama administration may have been more stringent and less inclined to award disability benefits than Bush--though the award ratio has steadily declined since Clinton closed out his second term. (ibid.) 

However, there is still the disconcerting fact that when Bush left office, there were a total of 7.4 million people receiving disability benefits, and at the end of Obama's first term there were 8.8 million. So, the number of awards may be on the decline, but the number of people receiving payments over the long haul have continued to increase.

Putting things into perspective, "Since [President Obama’s] inauguration, the US has generated just 841,000 jobs through November 2012, a number [that] is more than dwarfed by the 17.3 million new [food stamps] and disability recipients added to the rolls in the past 4 years." ( Zero Hedge, as reported HERE)

More disturbing still, according to CNN: "All told, the federal government spent nearly $250 billion in 2011 paying more than 23 million Americans some type of disability claim. That's about 7% of the overall population, and 16% of the workforce. Those numbers don't even include people out on worker compensation claims -- which are mostly paid for by private companies. Five states also offer short term disability, and there are nearly 1 million workers receiving private disability insurance."(See HERE)

A Forbes article points out regarding the skyrocketing disability payouts, "While part of that growth can be explained by the aging of the U.S. population, the largest factor in the proliferation of disability spending comes from the fact that Congress has dramatically expanded the definition of who gets called 'disabled.' As a result, many able-bodied Americans have been granted government paychecks for life, crowding out our ability to direct needed resources to the genuinely infirm."(See HERE)

Another explanation for the growth in disability payouts, and one that also relates to the decline in workforce participation rates mentioned in a previous article, "discouraged workers are increasingly dropping out of the labor force. While the number of people with jobs has climbed 2.7 million since June 2009, the pool of Americans who aren’t in the labor force at all has shot up by 7.5 million. A great many of these people will likely never come back to the workforce even if the economy does rebound: not because they’ve aged into retirement but because they’ve signed up instead to get disability benefits — joining the federal government’s Social Security Disability Insurance (SSDI) program." (See HERE)

To an extent, disability insurance has become a longterm replacement for unemployment insurance.

Thus, one of the Leftist LUNC of Obamanomics is that instead of putting more people to work as promised, it has inadvertently created costly incentives for less and less people to work, and thus less and less people to pay for the costly incentives not to work.

For an explanation as to why this Leftist LUNC has occurred, please see: Gov: Wrong Tool for the Right Job - Strength in Numbers and Cold Nanny,, and  The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, The Politics of Spending--Intro, The Politics of Spending--Debt, The Politics of Spending--Public vs. Private, The Politics of Spending--Crony-ism, The Politics of Spending--Education, and The Politics of Taxing the Rich. [the unlinked topics will be posted later as they are completed]

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