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Cutting the Budget, Bleeding Us Dry

2:23 pm in Uncategorized by Michelle Chen

Originally posted at In These Times

If you feel like that recovery we keep hearing about hasn’t quite trickled down to your block, there’s a good reason. A huge swath of the country’s workers are out of sync with the economic cycle, continually falling further behind the rich. And, now Obama’s proposed budget may hinder them even more.

According to a new multi-year study by Pew’s Economic Mobility Project, many families are priced out of “recovery” for reasons that long predated the recession and will persist indefinitely even as the economy “bounces back.”

Though it’s unsurprising that economic insecurity becomes more ingrained over time, the Pew study reveals that struggling families have had to make trade-offs that further deplete their’ resiliency for coping with the next crisis. According to the analysis, “Those without personal savings and kinship networks to support them frequently used resources they had allocated for their children’s education or their own retirement to fund short-term needs.”

Experiencing unemployment is linked not only to temporary income loss, but to a long-term erosion of wealth over many years. With long-term joblessness still at epidemic levels, the trauma of the recession may bleed into a lifetime of hardship, freighted with crushing debts,  or dependency on meager public benefits, or the foreclosure of their children’s college prospects.  Read the rest of this entry →

How ‘This American Life’ Got Disability Wrong

3:44 pm in Uncategorized by Michelle Chen

Originally posted at In These Times

Also see Tom Thumb’s post

NPR, This American Life

dramatic investigation aired this week by This American Life raised concerns about federal disability insurance with its portrayal of the system as dysfunctional, financially unsustainable and ballooning out of control.

But experts say the program omitted key evidence that the doubling of workers on disability insurance since 1995 has been driven by genuine need.

In the show, featured on National Public Radio, This American Life reporter Chana Joffe-Walt explores a poor Alabama town where 1 in 4 people live on disability insurance. The interviews with working-class beneficiaries depict them as victims of a culture of dependency, convinced that there’s no real job they could do, and prey to vulture-like lawyers. One attorney, who helps people appeal disability insurance rejections, boasts, “I’ve created some of the problems for the government because so many people appeal.” Joffe-Walt raises hand-wringing questions, “Who is making the case for the other side? Who is defending the government’s decision to deny disability?”
In fact, the government has staunch defenders of its right to deny disability benefits: pro-market conservative commentators. They argue that while other federal assistance programs have severely tightened since the neoliberal “welfare reform” of the 1990s, disability (which was expanded after its 1956 enactment to include more age groups) has become a de facto welfare system plagued with “misaligned incentives” that could lead to insolvency. Some conservatives use this narrative to make the case for privatizing disability insurance, in tandem with the push to privatize Social Security.
But according to the Washington, D.C.-based think tank Center on Budget and Policy Priorities (CBPP), the driver of growth in disability beneficiaries isn’t “misaligned incentives” or, as the show suggests, people taking advantage of an over-generous system. It’s simply more people.