Welfare Nation Alert: Disability Fund To Run Out Of Cash In Two Years

Tyler Durden's picture

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"

There was also The Number Of "US Citizens On Disability Is Now Larger Than The Population Of Greece", which as the title suggests, there was a startling surge in Americans claiming benefits:

 

But most importantly, one should read "Two Charts Exposing America's Record Shadow Welfare State", "Meet The Disability-Industrial-Complex: Up To 45% On Disability Insurance Are Frauds" and also "1000s Of Veterans Busted For Massive Benefits Fraud" because sadly there is now extensive evidence that to many, Disability Insurance has become nothing but a piggy bank for millions of unscrupulous, lazy "retirees" who are fraudulently claiming they are entitled to benefits, in the process defrauding those who are truly disabled and have a rightful claim to this rapidly dwindling funding.

The latest data shows that after soaring to a record 9 million in recent months, the number of Americans collecting Disability Insurance has plateaued at just over 8.9 million.

Which, unfortunately, may be a few million too many.

As the following chart shows, after enjoying a period of generous asset inflows in the late 1990s and early 2000s, ever since the Lehman collapse, there has been a surge in capital outflows from the DI Trust Fund, amounting to approximately $30 billion over the past three years.

 

Here is why this is a problem:

 

In the chart above the Red line shows the total program expenditures which has soared at a pace far greater than the level of receipts, which has been largely flat over the past decade. How much of that is due to the criminal abuse of the SSDI is unknown but it is surely a sizable amount.

The bigger problem is the black line: it shows that after peaking at $215 billion in 2008, the fund now has only $60 billion left as of the end of 2014, having burnt through nearly three quarters of its assets in 6 years.

The biggest problem: unless the pace of cash burn slows down dramatically in the immediate future, the Disability Insurance trust fund will do something it has never done before in its history: its assets will go negative.

While the obvious response will be clear - to issue more debt and prefund the DI with the receipts - such as "strategy" will merely solidify the Ponzi nature of the Americans welfare state, and confirm that absent a dramatic overhaul of the US retirement system, it is only a matter of time before the US has to issue billions if not trillions in debt just to meet its already accrued retirement obligations.

Then again, with developed nations now relying exclusively on their central banks to buy the majority of the debt they have to issue, an amount that will hit a record in 2015...

... is anyone really surprised that the Pyramid scheme supporting the entire "developed world" is finally being revealed for all to see?

h/t nolsgrad

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ZerOhead's picture

"... the number of Americans collecting Disability Insurance has plateaued at just over 8.9 million."

Oddly 8.9 million is the exact number of US soldiers Nuland says is required to take on the Russian army in the Ukraine. Free painkillers, methamphetamine and tow anti-tank missile equipped wheelchairs for all...

knukles's picture

"the bigger problem is the black"
I hope that wasn't intended.

max2205's picture

Ruth row

Print Moar

 

 

 

Mentaliusanything's picture

I find the term 'Black Line", Racist in the extreme. Please be more Politically correct and confuse me more

 

one_hundred's picture
one_hundred (not verified) ZerOhead Mar 28, 2015 9:01 PM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com

q99x2's picture

That's ok. they're not disabled anyhow. They are just in it for the money. Myself I prefer to go to college to get my bucks. One day I hope to work in another country.

Basically it was a fair trade by the NWO banksters. The people of America would be allowed to vacation for 6 years while the NWO prepared an army and militarized police force to kill them. Times up bitchez.

Nostradumbass's picture

This disability retirement really pisses me the f*ck off.

I have heard that it is routine for the bloated pensioners in 'public safety' jobs to file for disability retirement in order to get out of taxes. These f*ckers already are pulling down a killer pension without having to defraud the taxslavers...

I have an idea: watch your neighbors who are on a disability retirement. If they seem to be fraudulently collecting a disability income, turn them in and demand that their fraudulent payments be collected along with penalties.

Have a reward system in place to rout out these SOB's.

And don't get distracted. Politicians are FAR worse and we need to clean house of ALL parasites on the taxslavers...

WillyGroper's picture

You live in a glass house? Snitches get stitches.

I know both legit & fraudulent folks collecting. There's an industry of lawyers in business for just that. I've been solicited twice from the company I retired from, with "help" offered from an outfit called Alsup.

What the freeloaders (that own property) don't understand is they are on medicaid. Bye Bye property, the state owns it now.

Nostradumbass's picture

"You live in a glass house? Snitches get stitches."

Bullshit. Just try.

Worked and paid for my retirement.

Greed will eventually destroy itself... but why should everyone else suffer in the meantime?

Take back the the liar's gains.

 

WillyGroper's picture

"

Worked and paid for my retirement."

So did I. Want a medal crybaby?

sun tzu's picture

So did the bankers and politicians, so stop bitching about them

fattail's picture

There is no hope for reforming and saving the system.  Our best alternative is to facilitate, encourage, and hasten the collapse of the system, and position yourself to take advantage of the chaos.  TPTB of course will kick this can as long as they can.

froze25's picture

Over load the system while passing out pocket constitutions.

drdolittle's picture

see something say something, right?

Creepy A. Cracker's picture

"What the freeloaders (that own property) don't understand is they are on medicaid. Bye Bye property, the state owns it now."

They are "smart" enough to game the system, taking money from working people, but not smart enough, with all of those lawyers, to put their property in a land trust where their ownership is hidden?  If you don't own it it can't be taken from you.

sun tzu's picture

They can still take it from you even in a trust. Every trust that is set up has a TIN that is linked to an SSN. 

Creepy A. Cracker's picture

Bummer.  So a trust can't be held by a corporation/trust holding entity not linked to the previous owner's (the one who re-deeded it to a trust) SS number?

IdiotsOutWalkingAbout's picture

"What the freeloaders (that own property) don't understand is they are on medicaid. Bye Bye property, the state owns it now."

These two statements are both false.

1. BH became eligible for Medicare benefits one year after disability benefit checks were first paid to BH last summer, not Medicaid. BH thinks Medicaid is coverage for people who did not pay into the SS system with payroll deductions, like autistic kids and....... BH don't know, maybe who all.

2. Not true about the property. You must be talking about one of the welfare programs for low income people. This statement is so not true. At least BH was not required to sell any property, though declared disabled more than a year ago.

BH did have a high paying job, so paid in during the exponential growth phase 2008 - 2010. That dried up during the work drought that followed like the back lawn of a California McMansion.

BH was also able to see a real doctor again and got some relief on $900/m month humalog insulin costs paid out of broke ass savings and replace the old ball-n-chain BHinsulin pump. I "rents" the pump from a gov approved supplier for $150/m in perpituity it looks like, as a cost share, paid with the gov SSI pay. Despite repeated requests, this supplier never sends an account ledger sheet that would illuminate the detailed costs and payments the patient, customer, consumer, useless eater is making.

 

 

chunga's picture

Public "servants" are eligible for this for just being a jerk so it's practically mandatory.

A well respected public service doctor will say so. The trouble is, if you turn one of them in another public servant will come along and throw you in jail. Unless you're one of them, and then you wouldn't do it in the first place as public service tends to run in the family because nepotism is patriotic.

davidalan1's picture

We need a smaller "lock box"...

OldPhart's picture

"We donn need no steekin' lockboxes!"  Al Gore, 2016.

crisrose's picture

 

'The Social Security Administration (SSA) defines obesity as a chronic and complex disease that is characterized by excessive accumulation of body fat. Obese adults are those with a body mass index (BMI) of 30 and over. Morbidly obese adults have a BMI of 40 or more. (Overweight adults have a BMI of 25-29.9.)

A medical provider will also look at excess fat when determining obesity, because if someone has a very large percentage of their weight coming from muscle, they may have an elevated BMI but not be obese. Similarly, a person may have a “healthy” BMI, but if they have little muscle, they may have an unhealthy percentage of their body weight coming from fat.

Obesity is involved in metabolic syndrome (sometimes called obesity syndrome), which involves an enlarged waist circumference (abdominal obesity), insulin resistance, elevated triglyceride levels, and high blood pressure. But to qualify for Social Security or SSI disability, an individual needs more than a diagnosis of metabolic syndrome or even diabetes. The obesity or metabolic syndrome has to have caused damage through cardiovascular disease or diabetes or have very limited mobility and functional abilities.

This article discusses getting disability for obese adults. To read about getting disability for an obese child, read our article on SSI for childhood obesity.'

 

http://www.disabilitysecrets.com/conditions-page-2-45.html

crisrose's picture
Social Security Disability Claims on the Basis of Autism

The required level of severity for autistic disorders is met when the following requirements are satisfied. A doctor must have found the child has:

  • deficits in reciprocal social interaction
  • deficits in communication and imagination, and
  • a restricted repertoire of activities and interests (not needed for Asperger's syndrome).

And these deficiencies must cause serious limitations in at least two of the following:

  • communicative/cognitive functioning
  • social functioning
  • personal functioning, and/or 
  • sustaining concentration, persistence, or pace.

 

http://www.disabilitysecrets.com/conditions-page-2-53.html

crisrose's picture

 

'You may be able to qualify for Social Security Disability benefits based on adult attention deficit disorder.

Due to the subjective nature of an adult ADHD diagnosis, it's essential to have strong supporting evidence in order to get your disability claim approved. The SSA will want to see written documentation of your symptoms from sources such as doctors, employers, and teachers. Ideally, your SSD claim file should include:

  • records from a psychiatrist or psychologist showing a specific diagnosis of adult ADHD, with supporting documentation (doctor's notes, questionnaires, and so on)

  • documentation of what treatment methods (medication, therapy) you've tried and what the outcome was

  • records from former employers that demonstrate your difficulties with concentration, hyperactivity, impulsivity, or other ADHD symptoms

  • academic records displaying ADHD indicators such as late assignments, poor grades, and missed classes (or other verification that you had ADHD or ADD symptoms as a child and it affected your school work), and

  • a detailed form (medical source statement) completed by the therapist who is treating you for your ADHD, indicating their opinion as to the severity of your condition and its effect on your daily activities.'

http://www.disabilitysecrets.com/page1-9.html

crisrose's picture

Are you fat, lazy and/or stupid?  Suffer from a repulsive personality?  

You too can get free money from the US government!!

 

Winston Churchill's picture

A lot of The fat, lazy and stupid are  directly employed by Uncle Sam already.

They are called public servants for some reason that totally escapes me.

lasvegaspersona's picture

crisrose

all those folks on SDI will find life harder when what's coming gets here. It may seem like a sweet scam now but thosewho can't out run the bear will be the first eaten. In spite of the temptation of free money or even unemployment, those who keep up skills and stay fit will eventually be back in demand when the government checks stop coming (or if they won't buy anything as happened in the Weimar).

Creepy A. Cracker's picture

Awesome!  ADHD cash (other people's money) rolling in, here I come!

Oquities's picture

inability to speak fluent English is also a factor.  wait til 10 million obese, diabetic beaners get their 5 years in, then call Binder & Binder.

ebworthen's picture

Kind of hard not to go crazy in this society. 

When you see corporations deemed "individuals", and "affordable" care seen as a mortgage payment monthly premium, non-stop pointless wars against enemies we created, none of the criminals on Wall Street who created the 2008 crash in jail but lauded as "visionary leaders", and $80/Billion per month of QE for over a year to juice Wall Street but "money running out for S.S. trust fund". 

Is it any wonder people are filing disability claims for mental illness?

chunga's picture

Right?

This "disability fund" more than likely gets looted all the time by some finance experts who are supposed to be just "managing" it while their regulator buddies just stand there and laugh.

Creepy A. Cracker's picture

So you believe that people do not voluntarily work for corporations?  There is nothing wrong with people being represented, voluntarily having a voice, by their employers.  There IS something wrong with the government being so enormous, burdensome, and controlling that policies and decisions have such high bidding placed on them.

socalbeach's picture

Correct me if wrong, but I thought the SS "trust funds" are an accounting fiction.  In other words, it would make no difference if they had $2 trillion or $100 trillion.  The funds contain non-negotiable Treasuries, and for each extra dollar in expenditures, an extra dollar of Treasury debt must be issued.

lasvegaspersona's picture

...or they could raise taxes...but I'm cracking myself up now....they'll just borrow more...

socalbeach's picture

good thought, didn't think of that.

Anyway, back to the original point, it's kind of discouraging how many people fall for this "trust fund" scam, as if it contains anything of value that can be sold to obtain money.

yogibear's picture

Trillions for Wall Street and the 1%ers in the form of bailouts and rigged markets. Billions for the 99%.

In the mean time bring in more illegals and make them legal giving them more welfare.

Hannibal's picture

All they need to look is at where Pentagon/NSA/CIA/DHS get their funds from.

Federal employees, including military personel get their paycheck from money "printed" out of thin air. SO what's the problem Virginia.?

max2205's picture

Or take it from that overseas war contgency fund or give back all the iou s Congress stole from Soc Sec?

 

Didn't think so 

Kelley's picture

It this rate, the disability insurance fund will have a negative balance in 2 1/2 short years!

stant's picture

Quite sure catch 22 will keep me working until I am dead. But I have a cabin in the boonies by a river .that's where you will find me slumped over on the porch

Its_the_economy_stupid's picture

i see it daily in my office (no, i don't work for the government).

henry chucho's picture

I predict a lot of disabled people will be making miraculous recoveries in 2 years..

Dre4dwolf's picture

Or the suicide rate will jump.

Dre4dwolf's picture

We spent some folks money.

Sudden Debt's picture

President Hillarrious will just print the money and throw those capitalist feminist pigs who work and don’t agree in one of the new gullachs.

 

lasvegaspersona's picture

The idea that there are "2.4 trillion in assets is silly and only makes sense if you use non GAAP (government) accounting. The only way  these 'assets' are really there is if the government uses its funds to pay the bonds that come due.  It is exactly the same as saying "there is no money but we'll fund them anyway."  The money BTW has to be borrowed like about 40% of the USG budget. This article makes it sound reassuring as if there is something of real value cushioning the future of SS beneficiaries. Only the good will of the USG towards its citizens protects the retired. That lock box has been full of empty promises forever.

didthatreallyhappen's picture

how do you run out when you can print money?