Stop Bullshitting About Disability, Conservatives

It’s an icon of faith amongst conservatives that more and more people are claiming disability, and that these “cheaters” are part of the problem with this country.

Give it up. It isn’t true.

Here’s the data from the Social Security Administration:

What is being shown here? It is the contribution to the growth rate of claims by three groups: 1) retirees, 2) their survivors, and 3) the disabled.

For example, claims grew by 2.5% in 2011. Most of that (1.8%) came from retirees, a third came from the disabled (0.8%), and survivors actually decreased a little.

Now, look at that green line. It does spike a bit around the recessions in 2007-9, 2000-1, and 1990-1.

But, the predominant pattern is that it’s been roughly constant since the late 1980’s.

So what’s going on here?

Well, first, retirees are increasing. This has a pretty obvious cause: birth rates declines during bad economic times, and that trough in the mid-90’s is 65 years after the Great Depression. We’re now getting into the baby-boomers claiming social security, and the blue line is trending up.

And secondly, new disability claims have been more or less constant since the late 1980’s. At that time the oldest baby-boomers were in their early 40’s, and the youngest were in their mid 20’s. This is prime working years, where disability often strikes.

Now that some of the baby-boomers are retiring, they will no longer be eligible for disability claims. When we should start to worry is if that green line doesn’t start to drop towards zero a bit — over the next 20 years — as the baby bust of Generation X filters through the economy.

But, claiming that disability claims are somehow out of proportion to their recent history … is just false.

OMG–Would You Look at That

I love these nighttime satellite shots, but this one shows something new:

I was picking out the big cities for fun when I noticed the brand new big city: it’s not that centrally bright, but you can easily see the smudge of oil drilling in North Dakota (at the top center).

Technorati Tags: bakken,shale,fracking,north,dakota,night,lights,satellite

Straight Talk from Paul Krugman

Krugman on the “fiscal cliff":

The point is that when you put Republicans on the spot and demand specifics about how they’re going to make good on their posturing about spending and deficits, they come up empty. There’s no there there.

And there never was. Republicans claim to be for much smaller government, but as a political matter they have always attacked government spending in the abstract, never coming clean with voters about the reality that big cuts in government spending can happen only if we sharply curtail very popular programs. In fact, less than a month ago the Romney/Ryan campaign was attacking Mr. Obama for, yes, cutting Medicare.

He’s right. Grandma’s checks are the problem … and the Republicans are unwilling to stand up and point this out.

Read the whole thing, entitled “The Big Budget Mumble” in the December 3 issue of The New York Times.

Technorati Tags: krugman,republican,fiscal,cliff

Do Tax Breaks Encourage Saving?

America has a lot of quirks in our tax system. Commonly called loopholes, these are special provisions which allow taxes to be reduced because of certain choices made by taxpayers.

More properly, these are called tax expenditures. Some of these are on the table as we approach the “fiscal cliff” — the automatic tax increases set to take place in early 2013 by the debt ceiling compromise of 2011. The biggest tax expenditures are things like the deductibility for firms of health insurance premiums and pension contributions paid on behalf of their employees, and the mortgage interest deduction. Others were covered in this earlier post.

Now, there’s new research showing that at least some of these tax incentives don’t do much good:

… Every dollar …  spent on tax breaks increased total savings by about only one cent. In contrast, policies that automatically saved a portion of a worker’s income increased total savings by a substantial amount.

This suggests that tax incentives for people to save for retirement should be on the chopping block.

Seen In the Parking Lot

It didn’t occur to me to take pictures until it was too late. But … I spotted more than one vehicle in the parking lot at Saturday’s football game with a dealer plate from Williston, North Dakota.

The game was between Southern Utah and New Mexico Highlands U. Both schools are over a thousand miles from the oil fields of the Bakken Shale.

Obama’s Letter Grades

Way back in 2005 I started pushing the idea here at vX that we ought to grade economic growth on a letter grade scale.

I proposed two scales: an “old school” letter grade based on the normal distribution, and a “new school” letter grade scale based on a contemporary distribution across majors from my school.

Here’s collected in one place, are Obama’s letter grades:

Quarter	“Old School”	“New School”
2012 II	C	B
2012 I	C	B
2011 IV	B	A
2011 III	D	C
2011 II	C	B
2011 I	D	C
2010 IV	C	B
2010 III	C	B
2010 II	C	B
2010 I	C	B
2009 IV	B	A
2009 III	D	C
2009 II	F	D
2009 I	F	F

Of course, some claim “it’s all Bush’s fault”. Fair enough.

The table below shows the GPA for Obama using a cumulative sum. This means that entries at the top of the table include only the most recent quarters, while those towards the bottom include progressively more quarters in Obama’s average:

Quarters Included	“Old School”	“New School”
2012 II Only	2.0	3.0
2012 I to 2012 II	2.0	3.0
2011 IV to 2012 II	2.3	3.3
2011 III to 2012 II	2.0	3.0
2011 II to 2012 II	2.0	3.0
2011 I to 2012 II	1.8	2.8
2010 IV to 2012 II	1.9	2.9
2010 III to 2012 II	1.9	2.9
2010 II to 2012 II	1.9	2.9
2010 I to 2012 II	1.9	2.6
2009 IV to 2012 II	2.0	3.0
2009 III to 2012 II	1.9	2.9
2009 II to 2012 II	1.8	2.8
2009 I to 2012 II	1.6	2.6

For the period from 1947-2005, the “old school” GPA for America is 2.5. Obama never reaches that level. Brian Gongol has a graphic showing this.

The “new school” GPA for the same period is 3.25. That matches the average for all matriculated students in all graded classes at my school in 2004-5. In short, it’s what’s normal for today’s student given the grade inflation of the last few decades.

Obama beats that only if your reference set is exceptionally selective, and includes only the last 3 quarters. No more, no less.

I don’t know about hope, but we did get change.

Technorati Tags: obama,letter,grade,gpa,real,gdp,growth,rate

Why Is Macro So Hard: Students May Be Biased About the Data

Why would students be biased about macroeconomic data?

Students are probably biased about the data because it really is worse for them in their local area of knowledge.

When a college student learns about something like the unemployment rate, their reference set is probably their family’s household. But, there are 3 reasons why that family is likely to be worse off than the typical American household.

• he families of students often include younger people who are more likely to be unemployed because they have less stable employment histories, fewer skills, less interest in actively participating in the labor force, and perhaps even unrealistic expectations of their own worth.
• If a student has a sibling that’s unemployed, it’s likely that they may have moved back home.
• If you’re unemployed yourself, it’s likely that you may have gone back to school.

I’ve actually calculated the unemployment rate for the families of students in my principles classes, and it is often several points higher than the local average.

And why might this make a macroeconomics class harder? Well … it can’t be easy to take a class in which you are taught something that is not representative of your personal experience.