The Never-Ending Story of Government Cost Overruns

Why does virtually everything the government does cost more than we’re initially told?

In 2009, for instance, I warned that Obamacare would be much more costly than advertised, so I certainly wasn’t surprised several years later when the numbers began to climb.

Heck, I narrated an entire video warning that this would happen.

There are probably an infinite number of reasons why government programs wind up being needlessly expensive, but I think most of them fall into these four broad categories.

1. Government is inherently inefficient and wasteful (obvious to anyone who’s ever been stuck in a motor vehicles department).

2. Government doesn’t solve problems, and its failures are used as an excuse to increase budgets (a version of Mitchell’s Law).

3. Bureaucrats who produce cost estimates fail to incorporate behavioral effects (people acting in ways to take advantage of government largesse).

4. Politicians deliberately understate costs in hopes of tricking taxpayers into supporting their schemes (yes, we’re shocked that they lie).

These are some of the thoughts that went through my mind when I looked at this chart on estimated disability expenditures over time. As you can see, the government routinely underestimates the cost of the programs.

It goes without saying, of course, that the 2010 projection will be wildly inaccurate. The disability rolls have exploded during the Obama years.

But at least we’re not Greece, where you can actually get disability handouts for being a pedophile. In the United States, you have to do something far less offensive (like being a 30-year old who likes wearing diapers) to scam the program.

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Plagued by Rising Costs and Vulnerable to Fraud, It’s Time to Focus Attention on the Disability Progam

When I think of the disability program, I think of the bum who is collecting a check so he can be an “adult baby” and indulge his fetish of wearing diapers. Though I guess that’s not as bad as the situation in Greece, where you can get a disability payment for being a pedophile.

But this is a much bigger and more serious issue. Earlier this morning, I took part in a joint Brooking Institution/American Enterprise Institute/Secretary’s Innovation Group conference on the disability insurance program.

I only had a minor role, posing question to Mark Duggan of the University of Pennsylvania and Stephen Goss of the Social Security Administration, but it was a very useful exercise because I was exposed to some sobering details about the program.

Let’s review a couple of Professor Duggan’s charts, starting with a look at how the disability rate has exploded in the past 22 years.

And here is some very disturbing data showing that much of the increase is in the areas that are most subject to abuse because of subjective judgements about “bad backs” and “depression.”

Hmmm…, I’m a bit depressed about the ever-rising burden of government. Maybe I should get a check from the government!

Joking aside, I briefly touched on this issue in a recent CNBC interview. Here’s the segment dealing with the disability program and the disturbing rise in dependency.

I’m not overly impressed by the counter-argument from Christian Weller. Does he really want us to believe that the service sector jobs of today are more disabling than the manufacturing jobs of 20-plus years ago?

This is a depressing topic, so let’s close with a couple of cartoons, starting with this gem from Chip Bok.

It’s amusing, but keep in mind that we have an unusually high joblessness rate right now, but it would be even higher if we counted the people who shifted to this other form of unemployment dependency.

And here’s a Chuck Asay cartoon that I really like because he augments my argument in the interview that it hurts the economy when you lure workers out of the job market and make them wards of the state.

Asay takes it one step farther and shows the lifeboat sinking. That’s basically what will happen if we don’t adopt the entitlement reforms that are needed to rein in the welfare state.

P.S. If you want some jokes referencing the disability program, we have the politically correct version of The Little Red Hen, as well as two very similar jokes about Jesus performing miracles and how liberals differ from conservatives and libertarians.

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