This ain't Hell, but you can see it from here

Category: Economy

  • I Hate to Repeat Myself . . .

    . . . but I will.  From just over a year ago.

    A year ago, just short of 9 million individuals were receiving Social Security disability compensation.  Five months ago, that number was up to around 11 million.

    The number just keeps on climbing.  At the end of August, per the Social Security Administration the number of individuals receiving Social Security disability payments was just over 14 million.

    The program also appears rife with fraud.  It looks like about half of all newly approved claims actually are bogus under Federal law – just like a year ago.  (Federal law regarding Social Security Disability compensation requires that the individual be unable to perform work of any type to be eligible for payment.)  It appears the same could easily be true of about half of all such Social Security disability claims, period.

    It’s now costing Uncle Sam more to pay Social Security Disability benefits than it does to run the Department of Homeland Security, the Justice Department, and the Labor Department – combined.  The annual outlay for Social Security Disability payments is now approximately $135 billion.

    Apparently CBS has now finally figured out the above.  So it’s not just the conservative part of the blogosphere that’s noticing the issue any more.

    Yes, some people are so physically or mentally “messed up” that they legitimately rate Social Security disability payments.  But IMO, a huge fraction of the recipients appear to be using the program as nothing more than an undeserved, alternate form of permanent unemployment compensation.  Further, in many cases it seems they’re being aided and abetted in what appears to be blatant fraud by compliant Social Security officials – and by lawyers who in some cases end up getting paid literally millions by the Social Security Administration.

    The Social Security Disability “Insurance” Fund is in absolutely horrible financial shape.  As you might expect, it’s in far worse shape than the rest of Social Security.

    For the Social Security disability program, the proverbial “well” runs dry in 3 years, give or take; some sources estimate the fund will be exhausted in as little as 18 months.  So I’m guessing we can look forward to another push to raise Social Security taxes yet again some time in the next 3 years.

  • Washington Post; buy more pr0n to save the economy

    Yes, the Washington Post says that the economy only looks bad because the pr0n industry has lost 22,000 jobs in a month;

    That’s a huge drop. It’s probably enough to change how analysts see this jobs report, from kinda gloomy to really gloomy. But what’s behind it?

    The data don’t tell us, right away. But news reports would suggest that pornography is a strong possibility.

    More specifically, the temporary shutdown of America’s adult film industry last month.

    In the middle of August, an adult actress, who goes by the name Cameron Bay, tested positive for the HIV virus. That prompted studios to stop filming. A week later, the trade group that called for the shutdown essentially called it off, because all other performers who had worked with Bay tested negative for the virus.

    Yeah, well, that explains it. We’re a pr0n-based economy, so you guys aren’t buying enough pr0n to make this administration look good. Hey, I’m here doing my part, the rest of you need get on board.

  • Manchin mad at Obama again (Updated with video)

    In case you missed it yesterday, the president tried to divert our attention from his administration’s failures once again by announcing that he’s going to make the Environmental Protection Agency put new emission standards in place for coal-fired power generation stations. Somehow that will save the world’s environment because we tighten emission standards on the billion tons of coal that we burn in the US compared to the eight billion tons that are burned worldwide.

    Of course, the cost of complying with these new standards will fall on consumers, raising the cost of our electricity, effectively a tax which will affect lower income workers most. In the middle of a jobless recession. You know like this administration changed the culture of the military in the middle of a war because intentions are more important than results.

    Well, anyway, Joe Manchin, the junior Senator from West Virginia was just on Fox News expressing his outrage and telling us how he’s mad at the president for this announcement which will greatly impact this state, since we’re still a coal-based economy. He was elected here mainly because he was good on guns and good on coal. Since he was elected, he’s jumped in bed with Chuck Schumer over guns, so this latest faux-anger at the president over the expected hits to the coal industry and consumers will probably end up the same way.

    Fox News admits that the process is a long one;

    Under the process outlined in the Clean Air Act, the EPA cannot act unilaterally, but must work with states to develop the standards, said Jonas Monast, an attorney who directs the climate and energy program at Duke University. An initial proposal will be followed by a months-long public comment period before the EPA can issue final guidance to states. Then the states must create actual plans for plants within their borders, a process likely to take the better part of a year.

    Then the EPA has another four months to decide whether to approve each state’s plan before the implementation period can start.

    In other words, it’s another lawyer-employment opportunity, because most of the regs that come out of the EPA are litigated before they’re completely implemented.

    Video added, below the jump;
    (more…)

  • SECDEF to DoD Civilians: You’re Getting 11 Unpaid Days Off

    The SECDEF has announced DoD’s decision on civilian furloughs this afternoon.  That announcement directs a total of 11 unpaid days off for most of the DoD civilian workforce (650,000 of 750,000 civilian employees will be affected) between now and 30 September 2013.  Furloughs will begin the week of 8 July 2013, with one unpaid day off per week.  They may end earlier than the end of September if financial conditions allow.

    Sequestration, of course, is the reason.

    The financial savings will not be inconsequential.  The exact dollar amount isn’t easy to calculate quickly.  But making an assumption or two, we can come up with what should be a reasonable, “ballpark” estimate.

    Eleven workdays equates to 88 paid hours per employee.  Since the furloughs will affect 650,000 civilian employees, that will save salary and benefits costs associated with 57,200,000 staff-hours.

    Benefits costs typically add between 1/3 and 1/2 to the cost of hourly wages.  Let’s be conservative and use 1/2 to get a “worst case” number.

    Determining the average hourly wage across all affected DoD employees would be difficult.  So let’s assume that averages out to an hourly rate of somewhere in the mid-GS12 ramge.  This is probably too high – but we need to use something.  It will at least be “in the ballpark”.

    Doing the math, that works out to a savings of about $3,260,400,000

    No, that’s not chump change.  But to put it in perspective:  that’s also not much over 0.6% of this year’s DoD 2013 base budget – and less than 0.5% of DoD’s 2013 total outlays, when contingency operation supplemental appropriations and other outlays are counted.

    But we should count our blessings.  Uncle Sam still has plenty of money to pay for really nice hotels when the POTUS or Vice President travel.  Or to fly the Vice President that 110 miles or so between DC and Wilmington, DE of AF-2 most weekends.

    Maybe you don’t want to mention that fact to any of the folks who’ll be directly affected by the furlough, though.  Since the furloughs will be imposed on a 1-day-per-workweek basis, those individuals will be seeing a 20+% cut in take-home pay for 11 weeks.   That might affect their outlook, attitude, and sense of humor just a bit.

     

  • Federal Fiscal Follies – The Disability Scam (an Update)

    Thought I’d drop a quick update on another Federal program rife with fraud.  Yeah, yet another one of those Progressive “good ideas” that ended up paving the road to a famous but not-so-good destination.

    According to the Social Security Administration, nearly 11 million Americans were receiving Social Security Disability payments in April. The precise total was 10,962,532 individuals.

    For comparison, Greece’s last census put the population of Greece at 10,815,197.

    You read that correctly.  Today, we’ve got more people drawing Social Security Disability in the USA than Greece has people.

    The number works out to almost 3 ½% of the total US population on 30 April 2013.  And as I’ve written before, investigation indicates that about 1/4 of all Social Security Disability cases granted recently appear to have been granted improperly.

    April also marked the 195th consecutive month that the number of persons receiving Social Security Disability payments increased.  That’s 16 years and 3 months of consecutive increase in the Social Security Disability lists.

    It’s beginning to look like Social Security Disability is at risk of becoming just another free handout program.  Hell, for around 1/4 of those recently approved, that’s exactly what it appears to be.

    Wonderful. Just freaking wonderful.

    Oh that ain’t workin’
    That’s the way you do it
    Get your money for nothin’ . . . .

  • About That Recent “Drop” in Unemployment . . .

    . . . it’s a chimera.  Or, if you prefer, it’s smoke and mirrors.

    You may have read that the “official” unemployment rate “fell” last month to 7.6%.  That means the economy is improving and good times are just around the corner, right?

    Um, no – it doesn’t.  That’s U3 unemployment, which is probably the single worst measure of employment when it comes to showing the true state of the US economy.

    The U6 unemployment rate – the unemployment which counts all who want to work full time, but aren’t for whatever reason – stands at 13.8%.  And though U6 is better at showing the true picture of the economy, even that’s misleading.

    Job creation in March 2013 was abysmally bad.  Only 88,000 net nonfarm jobs were added in March 2013.  (Job creation totals for Jan and Feb 2013 were revised downward, too – something that seems to have become a routine thing for quite a while now.)  That’s far fewer new jobs than needed to put people back to work.

    So, why did “official” unemployment drop?  Simple:  nearly half a million Americans – roughly 496,000 – simply got fed up and quit looking for work.  When people quit seeking work, they’re no longer counted when calculating unemployment rates.

    Had those same folks kept looking for work, the unemployment rate in March 2013 would have risen – to 7.9%.

    A far better measure of economic health is the labor participation rate.  This is simply the fraction of the US civilian non-institutionalized population (essentially those between 16 and 64 and not in the military or institutionalized) that is either seeking work or actually working.

    In that respect, we’re sucking the Big Wazoo.

    In March 2013, the US labor participation rate dropped to 63.3%.  That is the lowest US labor participation rate since May 1979 – during the Carter Administration.

    According to the BLS, the US civilian labor force in March 2013 was approximately 155,028,000.  That represents 63.3% of the US civilian non-institutional population. Of those, approximately 143,286,000 were employed; the remainder were actively seeking employment.

    However, the US labor participation rate in January 2009 was 65.7%.  If the same fraction of the population were participating in the labor force today, the US civilian labor force would be (0.657) * (155,028,000 / 0.633) = about 160,961,700.  Since only 143,286,000 are currently employed, if we had the same labor participation rate today as we did in January 2009 the “official” (U3) unemployment rate would today be 10.98% – not 7.6%.

    Unemployment in January 2009 was 7.8% with a labor participation rate of 65.7%.  Doing the math indicates we’d need employment today of roughly 148,406,700 to equal those conditions.

    What that means is that we’re more than 5 million jobs short of what we need just to get back to where we were at the end of January 2009 – 5.12 million jobs short, to be precise.  But don’t worry; the current Administration has things “under control” and “moving in the right direction”.

    Yeah, right.  Since January 2009, we’ve seen a fairly steady decline in the US labor participation rate of  about 0.048% per month – for 50 months, resulting in a net decline of 2.4%.  And the trendline for that decline doesn’t seem to be leveling off, either.

    I always wondered what would have happened had we reelected Jimmy the Clueless in 1980.  Economically, it looks like we might just be about to find out.

  • Federal Fiscal Follies, Part III (Revisited) – The Disability Scam

    I’ve written about this problem before here at TAH.  And I knew then the problem was bad.

    But I didn’t realize how bad the problem had become.  The problem is far bigger than I thought originally.

    When all costs are totaled, the Federal government is now spending more to support those who are “disabled” than it is on classic “welfare” and food stamps – combined.  The government is now making over 14 million Social Security disability payments each month – or more than 5 million more the nearly 9 million monthly payments I noted in my previous article.

    The problem seems to be getting worse as the economy “recovers”, too.  Since 2009, an average of 100,000 more people are applying for disability each month than new jobs are being created.  And less than 1% of those who became “disabled” since the beginning of 2011 have returned to the labor force – in spite of the statutory requirement that a person be unable to perform any type of useful work in order to receive Social Security disability payments at all.

    The overall cost to taxpayers today, including healthcare for these “disabled” folks?  Try about $260 billion – annually.  And increasing.

    Oh, and did I mention that people who are drawing “disability” from the SSA are not even counted as part of the US labor force, even if they’re actually able to work in some capacity?  God only knows what the US unemployment rate would be if Federal law were enforced regarding the criteria for receiving SSA disability payments rather than being widely ignored.  But you can bet it would be far higher than it is today.

    A lady from (of all places) NPR – Chana Joffe-Walt – has researched the problem in great detail and  discusses the issue here.  IMO her article is definitely worth a read.  And it’s depressing as hell.

    Here’s one final bit of “good news”:  according to the Social Security chief actuary, the SSA disability insurance program will run out of funds in 2016.  That’s about 3 years from now.

    In the 1980s, we heard about “welfare queens”.  They’re largely gone today.  But from what I see, it looks like they’ve been replaced by “disability drones”.

    Damn.  Just . . . damn.

  • “Free Man In Paris”? Not Exactly . . . .

    Well, the VP visited Europe recently.  It was a 5 night trip.  He spent one night in London, and one night in Paris.

    He stayed at very nice hotels – the Hyatt Regency in London, and the Hotel Intercontinental Paris Le Grand in Paris.  I won’t begrudge him that; after all, he is the VP of the United States.  And he did have to send an advance party, and bring security, staff, etc . . . .

    But perhaps whoever booked his rooms needs to work on their negotiating skills.

    Hotel cost for the VP’s London stay:  $459,388.65.  The sole-source contract was awarded non-competitively, and was for 136 rooms – and a total of 893 room-nights.  Average cost per room was somewhat over $510 per night.

    And the hotel cost for the VP’s stay in Paris?  A cool $585,000.50.  Not as many details are available here, so it’s unclear precisely what the nightly cost per room really was.  But if the number of room-nights is the same, that works out to around $650 per night.

    The above contracts appear to be for lodging only – no staff salaries, fuel, etc . . . .

    Yeah, you’re reading that correctly.  That’s apparently over $1,044,000 for lodging alone to support the VP staying one night in London and one night in Paris.

    In case anyone’s wondering:  the normal maximum authorized overseas lodging rate for US government travelers in London is $301 per night.  For Paris, $379 the normal maximum authorized is per night.  Exceptions exceeding this amount require special authorization.

    Obviously, this is a case where an exception was authorized.  And yeah, the VP doesn’t just walk in and get a room for the night; security considerations nix that.

    But it seems to me that you should be able to negotiate a nightly rate at least somewhere close to the maximum authorized for Federal travelers when booking a block of 130+ rooms including the POTUS or VP – like maybe within $50 or $100 per night, anyway.  Here, in each case it looks like the rate negotiated was at least $200 per night per room over that.

    And 136 rooms?  Really?

    But hey:  it’s the for the VP of the United States, so it’s cool.  And it’s only money, right?

    Yeah, that last bit is kinda my point.  It’s the US taxpayer’s money.  Over $1 million for lodging alone so the VP can spend two nights overseas just seems a bit much.

     

    PS:  it looks like the VP got around in style while he was in Paris, too.  His limo bill for the stay appears to have been $321,665.

    He’s got nothing on his boss, though.  According to the same article, when the POTUS visited Cannes in November 2011 for the Cannes Film Festival the limo bill there was estimated to cost $731,938 – with a “not to exceed” limit of $1,400,000.

    That visit to Cannes by the POTUS lasted approximately 36 hours.