Yes, Virginia, welfare states can go broke. From zerohedge.com:
Back in 2010, America’s primary retirement vehicle, the Social Security Trust Fund, did something it had not done in three decades done: it went cash negative, meaning that the costs were greater than the payroll tax revenues as a result of both the second great depression which sent the costs soaring, and America’s demographic Japanification as baby boomers started retiring by the tens of thousands with every passing day.
This prompted a firestorm of analyses, each framed by the ideological bias of its author and each eager to calculate how much time the Social Security Trust Fund has before it runs out of cash and with it, exposes the lie that is America’s welfare dream for current and future generations of workers.
The good news is that with combined grand total of $2.8 trillion in assets as of December 2014 across its various trust funds, a shallow cash burn rate meant that there are probably at least two more decades of funding left in Social Security before the abovementioned dreaded moment arrives.
The bad news is that if one digs a little deeper, something scary emerges: namely, the Social Security Disability Insurance (SSDI) Trust Fund.
For those unfamiliar, here is the official description:
The Disability Insurance Trust Fund is a separate account in the United States Treasury. A fixed proportion (dependent on the allocation of tax rates by trust fund) of the taxes received under the Federal Insurance Contributions Act and the Self-Employment Contributions Act are deposited in the fund to the extent that such taxes are not needed immediately to pay expenses. Taxes are deposited in the fund on every business day.
The trust fund provides automatic spending authority to pay monthly benefits to disabled-worker beneficiaries and their spouses and children. With such spending authority, the Social Security Administration does not need to periodically request money from the Congress to pay benefits.
The problem is that like the broader demographic bust that is plaguing all developed nations, America itself has seen a widely documents surge in disability recipients in recent years, covered extensively here on previous occasions such as in “The Un-Retiring, Increasingly Disabled Non-Working American Dream”
To continue reading: Disability Fund To Run Out Of Cash In Two Years
Part of the problem is the huge number of people who signed up for SSD when their 99 weeks of unemployment benefits ran out.
The SSA does not have enough Dr’s under contract to review many cases,so a lot of those collecting SSD are scamming the system-they are capable of working,there is no medical reason they can not work.
The other part of the problem is the lawyers who advertise their “expertise” in getting people their SSD benefits increase the number of people applying for benefits.
I’m fairly sure that if everyone receiving SSD had their cases reviewed by doctors,about half would no longer be receiving SSD.
I was awarded SSD benefits when I had to undergo a more than two year long series of surgeries,and back then-early 1990’s-it was much more difficult to get SSD. My case was denied,denied on appeal,then approved when it got to court and was heard by a judge.
Fortunately-for me-after 5 years or so,I was able to return to work.
Recently it seems it had become much easier to get SSD benefits-it began under Dubya-cases were automatically approved for certain things,under Obama,the list of “disabilities” that are automatically approved has grown even more.
The system will collapse under it’s own weight,leaving those who really are disabled with nothing.