A nation of deadbeats

By From page A6 | February 01, 2013

Republicans are just going to keep shooting their toes off as long as they continue to talk about means testing Social Security and Medicare. This is just a turnoff to a big chunk of voters — those already qualified for the two programs and those now worrying about their mix of future retirement income sources. The latter category includes the portion of the population in their 30s.

However, we see no disadvantage in shifting Medicare to a subsidized insurance plan chosen by the individual. One could still purchase supplemental or catastrophic insurance as is now done by many on Medicare. The $15,000 figure that Rep. Paul Ryan talked about would buy one heck of a lot of insurance on the private market.

Only one-third of Americans are seniors receiving Social Security and Medicare benefits. The real threat to the American fisc is the ballooning rolls of those receiving Social Security disability. As of December 2012 more than 8.8 million working age people took Social Security disability, which is three times the number receiving these disability payments in December 1990, according to Nicholas Eberstadt of the American Enterprise Institute. That means one in every 17 people in the labor force is on Social Security disability programs. It’s just another form of unemployment payments, a way to mask the true unemployment figure.

But it gets worse. Like some sort of mysterious dark matter there are more disability recipients than just the Social Security program. Eberstadt wrote, “The Department of Health and Human Services reports that more than 12.4 million working-age Americans obtained disability income support from all government programs in 2011. That’s more than the total number of employees in the manufacturing sector of the economy.”

Eberstadt’s analysis of the latest census data indicates that 49 percent of Americans “live in homes receiving one or more government transfer benefits.” And that is 20 percentage points higher than the early 1980s. The AEI resident scholar counts Social Security and Medicare as transfer benefits, but notes that these two programs account for only one-tenth of that 20-point increase.

The big bananas are Medicaid and food stamps, with 35 percent of the population accounting for these. The total is more than 100 million. Let’s repeat that number: 100 million Americans on food stamps and Medicaid.

This is part of the reason the U.S. Commerce Department reported Wednesday that the economy contracted 0.1 percent in the fourth quarter of 2012.

More than 7 percent of men in their late 30s “had totally checked out of the workforce even before the recent recession,” Eberstadt wrote, adding that is more than twice that of Greece. “The share of 30-somethings neither working nor looking for work appears to be higher in America than in practically any Western European economy.”

That is worrisome. It is echoed here in California by another study:

“More than 850,000 California teens and young adults, ages 16-24, are neither in school nor working,” according to a new Kids Count report released Dec. 3 by the Annie E. Casey Foundation and Children Now.

Calling them “disconnected youth,” the foundation’s report noted that these comprise 18 percent of this age group and it has grown 35 percent since the year 2000.

The states that are generating jobs — California is not one of them — are the states that have no income tax or are lowering income and corporate taxes. They are also working to reduce red tape. Again California is not one of them. Texas doesn’t even have zoning laws, which is why housing is more affordable there.

There are a lot of needy people in this country, but there are also a lot of deadbeats. Congress needs to investigate how the Social Security disability programs have grown so radically. Somebody in the federal government is doing some robo-signing.

Mountain Democrat

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