The Federal Disability Insurance Trust Fund doesn’t really have a long-term outlook. The trustees of the DI Trust Fund tell us in an annual report that the fund ended 2011 with just $154 billion in assets, down 15% from the asset total it had a year earlier.
Taxpayers are supposed to feed the fund with a 1.51% tax on payroll.
Fund managers are supposed to generate extra revenue by investing assets in government securities. Rates on government bonds are low right now, and the effective annual interest has dropped to 4.8%.
Because of the low rates, the weakness of the economy and changes in tax rules, fund revenue has fallen every year since 2007.
Revenue hit $106 billion in 2011, down 19% from the 2007 total.
The DI Trust Fund could be empty as early as 2016, or two years earlier than predicted a year ago, the trustees say.
The trust fund for Social Security old age benefits is supposed to keep going much, much longer — until 2035, when I’ll be 70.
In the past, Congress has “solved” DI Trust Fund problems by shifting revenue earmarked for the old age fund into the DI fund. Congress last used that “strategy” in 1994.
But that “strategy” isn’t exactly strategic, because it could bring the day when the old age fund runs dry even sooner.
It seems that we, as a nation, have decided to take the worst possible middle course between the welfare state approach and the pure free-market approach.
Advocates of a strong welfare state would say that we ought to offer rich benefits for the unfortunate. Certainly, any of us could become disabled. Almost all of us want to help people with disabilities, even if we’re not thrilled with paying taxes. Time to shut up and pay up.
Advocates of a pure free market approach might say that workers ought to save for bad outcomes, buy disability insurance, or recognize that they will have to depend on the voluntary charity of relatives, friends and strangers.
The advocates of a pure free market approach might say that, even though a transition to this approach might cause some pain, the resulting increase in economic efficiency and honesty might actually ease any genuinely unfair income inequality, reduce the number of people who are poor, and give solvent people more disposable income that they can use to contribute to charity, including charities that help people with disabilities.
Instead, it seems as if the United States has adopted the blow dryer approach.
We promise pretty good benefits and fund them with a trust fund filled with hot air.
In related news, the Life and Health Insurance Foundation for Education, Arlington, Va. – LIFE – says it will be using a soap opera parody, “All My Paychecks,” to promote the need for disability insurance.
That got me thinking of other leading parody opportunities, Hunger Games-style.
How about a reality show/game show set in a world that is different, but not by much, from our own?
The Republicans, the Democrats and the 9 Tea Party factions have divided the parts of the United States that New Zealand has not yet repossessed into 12 districts.
Benefit plan administrators at the Aon Milliman Towers Watson Wells Fargo Bank of America unit of Google Inc., Shanghai (Imperial Stock Exchange:GOOG), choose a male competitor and a female competitor from each of the 12 United Non-Repossessed States (UNRS) districts.
Each competitor is a worker with a disability sustained during the Great Patriotic War of Facebook Password Privacy Confiicts who wants to return to work.
The workers picked must compete for the ultimate prize — a secure, well-compensated job with full benefits — while facing some or all of the following challenges:
• Hostile front-line supervisors.
• Doctors, hospitals and other care providers who have no interest
whatsoever in scheduling appointments to fit in with a work schedule.
• Large, large piles of unpaid bills building up in their e-mail inboxes.
• Sadistic child daycare schedulers.
• An infinite, 5-dimensional maze with Social Security Disability
insurance (SSDI) claim examiners at the center.
• Animatronic tigers.
Which worker will survive to claim the prize position? The one who has disability insurance with strong return-to-work benefits…