Tuesday, October 14, 2014

Idea Knowledge Of Technology To The World

Idea Knowledge Of Technology To The World

Wednesday, October 1, 2014

Bachdoor The Best Brain Of Information

The Best Brain Of Information

Saturday, September 27, 2014

Idea Knowledge of Easiest Solution Here

Idea Knowledge of Easiest Solution Here

Wednesday, September 11, 2013

States Have an Incentive to Promote (Not Stop) Disability Fraud; So How Much Fraud Is There?

In response to Just How Distorted is the U.S. Unemployment Rate Number?, reader Bjorn asked "care to take a guess on the percentage of fraud among the population receiving disability compensation?"

Fraud Incentive

My Reply Follows:

I suspect fraud is in the neighborhood of 25-50% (and higher would not surprise me one bit). The reason is that States Have an Incentive to Promote (Not Stop) Disability Fraud.

This all goes back to 1996 when president Bill Clinton promised to "end welfare as we know it". He did indeed do just that, and fraud is the result.


The federal government pays disability, but states pay part of welfare costs. This creates a huge incentives for states to actively promote disability fraud (simply to get people off state-sponsored welfare programs).

Fraud escalated dramatically in the wake of the housing crash as jobs became scarce.

I discussed this previously in Unwilling to Work; 25% in Hale County AL Collect Disability, 14 Million Nationwide; A Simple Solution

Here is the key snip.
Clinton Ends Welfare As We Know It

In 1996 Bill Clinton signed a welfare reform act, that he proclaimed to be the "End of Welfare As We Know It". It was. People moved off welfare on to even easier to get disability programs.

Part of Clinton's welfare reform plan pushed states to get people on welfare into jobs, partly by making states pay a much larger share of welfare costs.

The incentive "worked" using the term loosely. Welfare rolls shrank but disability rolls soared.

Welfare Costs States Money Disability Doesn't
[From the NPR report "Unfit For Work" - Please read this snip. It's key to understanding the fraud promotion claim]

A person on welfare costs a state money. That same resident on disability doesn't cost the state a cent, because the federal government covers the entire bill for people on disability. So states can save money by shifting people from welfare to disability. And the Public Consulting Group is glad to help.

PCG is a private company that states pay to comb their welfare rolls and move as many people as possible onto disability. "What we're offering is to work to identify those folks who have the highest likelihood of meeting disability criteria," Pat Coakley, who runs PCG's Social Security Advocacy Management team, told me.

The company has an office in eastern Washington state that's basically a call center, full of headsetted women in cubicles who make calls all day long to potentially disabled Americans, trying to help them discover and document their disabilities:

"The high blood pressure, how long have you been taking medications for that?" one PCG employee asked over the phone the day I visited the company. "Can you think of anything else that's been bothering you and disabling you and preventing you from working?"

The PCG agents help the potentially disabled fill out the Social Security disability application over the phone. And by help, I mean the agents actually do the filling out.

There's a reason PCG goes to all this trouble. The company gets paid by the state every time it moves someone off of welfare and onto disability. In recent contract negotiations with Missouri, PCG asked for $2,300 per person. For Missouri, that's a deal -- every time someone goes on disability, it means Missouri no longer has to send them cash payments every month. For the nation as a whole, it means one more person added to the disability rolls.
Disability Fraud

Who is making the case for the other side? Who is defending the government's decision to deny disability?


And that in a nutshell explains soaring disability roles and massive fraud.
When Jobs Are Plentiful

When jobs are plentiful, most people would prefer to work. But, when jobs are scarce, and welfare pays more than a minimum wage job, many would prefer not to work.

I wrote about this aspect on August 20 in Why Work for $7.25 When Welfare Pays $15.00 in 12 States and $8.00 in 33 States? Is a Low Minimum Wage the Problem?

When states come in and actively promote fraud as a means to get people off welfare, guess what happens?

Disability fraud is the answer.
Thank Bill Clinton!

Key Stats

Here are some stats from "Unfit for Work"

  • Every month 14 million Americans receive a disability check.
  • In 1961 the leading cause of disability was heart disease and strokes, totaling 25.7% of cases. Back pain was 8.3% of cases.
  • In 2011 the leading cause of disability was a hard to disprove back pain, totaling 33.8% of cases. The second leading cause was an equally difficult to disprove "mental illness" at 19.2%. Strokes and heart disease fell to 10.6%.
  • In Hale County Alabama 1 in 4 receive disability checks.
  • One thing nearly every case in Hale County Alabama has in common is Dr. Perry Timberlake who defines disability in a rather creative way.
  • Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce.

Quantifying the Fraud

Fraud varies state by state with welfare benefits and by how aggressive states are in pushing people off of welfare on to disability programs.

Given the incentive of states to push people into disability programs, and for people to never leave disability once in the program, a reasonable person would expect fraud to be rampant.

I guess 25-50% of disability claims are fraudulent, but higher would not surprise me in the least given back pain has soared from 8.3% to 33.8% and "mental illness" is at 19.2%. Combined that is whopping 53% of disability claims! 

Unemployment Numbers

Inquiring minds are asking "how does this affect unemployment numbers?"

That's a good question, so let's crunch some numbers. 

With 14 million collecting disability benefits ...

  • 25% Fraud would add 3.5 million to the Labor Force
  • 33% Fraud would add 4.7 million to the Labor Force
  • 50% Fraud would add 7.0 million to the Labor Force 

Let's assume 25% fraud, a rather modest assumption given the incentives for states to promote fraud coupled with the fact that a whopping 53% of disability claims are for suspicious reasons.

The examples below assume use of my practical definition of unemployment: Those who want a job, but do not have one. I also assume those fraudulently collecting disability payments would want a job if the payments stopped.

Base Numbers (from the latest jobs report - see BLS in Wonderland)

  • Civilian Labor Force: 155,486
  • Unemployed: 11,316,000

To the base numbers we need to add those not in the labor force but want a job.
That number is 6,285,000 (for a chart and further details, see Just How Distorted is the U.S. Unemployment Rate Number?)

Calculation Assuming 25% Fraud

Labor Force: 155,486,000 + 6,285,000 + 3,500,000 = 165,271,000
Unemployed: 11,316,000 + 6,285,000 + 3,500,000 = 21,101,000
Unemployment Rate: 21,101,000 / 165,271,000 = 12.77%

Calculation Assuming 33% Fraud

Labor Force: 155,486,000 + 6,285,000 + 4,700,000 = 166,471,000
Unemployed: 11,316,000 + 6,285,000 + 4,700,000 = 22,301,000
Unemployment Rate: 22,301,000 / 166,471,000 = 13.40%

Calculation Assuming 50% Fraud

Labor Force: 155,486,000 + 6,285,000 + 7,000,000 = 168,771,000
Unemployed: 11,316,000 + 6,285,000 + 7,000,000 = 24,601,000
Unemployment Rate: 24,601,000 / 168,771,000 = 14.58%

That is the disability fraud angle. It does not include those fraudulently receiving standard welfare (nor does it include those working part-time but want a full-time job).

The welfare fraud calculation is complicated by the fact that many on welfare work. Nonetheless, it's reasonably safe to add another 0.5% to 1.0% to account for welfare fraud (for those not yet pushed into disability fraud).

Comparison to BLS

Using my practical definition of unemployment, and factoring in disability fraud (but not welfare fraud), a realistic unemployment rate ranges from 12.77% to 14.58%.

For comparison purposes, the BLS has a base unemployment rate of 7.3% and a U-5 Rate of 8.7% (supposedly counting those who want a job but did not look).

Mike "Mish" Shedlock

Tuesday, September 10, 2013

Short Translation of Obama's Speech: "Flip Flop"; Long Translation: "I Don't Have the Votes"

Readers may be interested in the Full Text of Obama's War-Mongering Speech on Syria.

Fake Diplomacy

I can sum up Obama's speech in two words "Flip Flop".

Obama backed down from his John Wayne McCain guns-a-blazing approach to a  fake-diplomatic stance "I have, therefore, asked the leaders of Congress to postpone a vote to authorize the use of force while we pursue this diplomatic path."

Mish Translation "God damn it! I don't have the votes"

No Votes

Failure to attain a majority in Congress was clear earlier today when Senate minority leader Mitch McConnell Said 'No' On Syria Strike.

Does Assad’s use of chemical weapons pose a threat to the national security interests of the United States? And the answer to that question is fairly obvious: Even the president himself says it doesn’t,” McConnell said.

McConnell stood his ground in contrast to House Speaker John Boehner, Majority Leader Eric Cantor, Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid who, like John McCain wanted to proceed with warmongering regardless of costs.

Politico notes "In just the past 24 hours, GOP senators including Roy Blunt of Missouri, Dean Heller of Nevada, Mike Enzi of Wyoming, Johnny Isakson of Georgia and Lamar Alexander of Tennessee have all come out against a strike."

Putin Saves Obama's Ass

Seems to me, Putin saved Obama's ass with a proposal to let Syria destroy its weapons. Obama turned a "God damn it! I don't have the votes" horror story into a diplomatic "Give Peace a Chance" moment.

Putin gained stature and Obama lost stature. Putin's win is Obama's loss even if temporarily allows Obama to save face.

Hitler Card In Play

Nonetheless, I do not buy the "give peace a chance" line, especially since Obama played the "Hitler Card".

"In World War II, the Nazis used gas to inflict the horror of the Holocaust. Because these weapons can kill on a mass scale, with no distinction between soldier and infant, the civilized world has spent a century working to ban them", said Obama.

A few Days Ago the Guardian accurately appraised the situation as "Faced with sparse support for launching cruise missiles into a civil war, John Kerry compared Bashar al-Assad": Adolf Hitler: When in doubt, say 'Hitler'

Assad (assuming he used gas at all, and that is debatable) used it on political enemies in a civil war. Hitler planned to exterminate an entire race of people, simply because of their race and their faith.

Seriously, how lame is that comparison?

What's the Difference Between the US Using Chemical Weapons and Others Doing the Same?

Blatant Hypocrisy

David Stockman nails the heart of US war-mongering hypocrisy with this question:

"After having rained napalm, white phosphorous, bunker busters, drone missiles, and the most violent machinery of conventional warfare ever assembled upon millions of innocent Vietnamese, Cambodians, Serbs, Somalis, Iraqis, Afghans, Pakistanis, Yemeni, Libyans, and countless more, Washington now presupposes to be in the moral-sanctions business?"

For further Stockman discussion, please see End of U.S. Imperium—Finally!? Obama About to Suffer Glorious Defeat in Congress?

The hypocrisy of Obama (like Bush before him) is astounding. The biggest user of chemical weapons in history is the United States of America.

Don't believe it? For details, please see U.S. Going to Kill Syrians to Show Syria that Killing Syrians is Wrong

Mike "Mish" Shedlock

Latest Polls Not Looking Good For Merkel, 12 Days Before election

The German election is on September 22. And with 12 days remaining, things do not look good for a Grand Coalition headed by Merkel.

Via translation, the latest INSA poll looks like this:

  • CDU/CSU - 39%
  • SPD - 28%
  • Grüne (Greens) - 11%
  • Die Linke (Left) - 8%
  • FDP - 4%
  • AfD - 3%
  • Pirate - 3%

I believe AfD will make the 5% cut. I do not know if FDP will make the cut. If neither makes the cut, an unstable "Grand Coalition" is theoretically possible three ways.

Possible Coalitions if Neither AfD Nor FDP Get 5%

  1. SPD + Grüne + Die Linke
  2. CDU/CSU + SPD ("Grand Coalition" with Merkel)
  3. CDU/CSU + SPD ("Grand Coalition" without Merkel)

Possible Coalitions if AfD, not FDP Gets 5%

  1. CDU/CSU + AfD (with Merkel)
  2. CDU/CSU + AfD (without Merkel)
A grand coalition including SPD is theoretically possible.

Possible Coalitions if FDP not AfD Gets 5%

  1. CDU/CSU + FDP (with Merkel)

Again, a grand coalition with SPD is also theoretically possible.

There are numerous combinations if FDP and AfD both get 5%.

One More Merkel Snag

The CDU/CSU-FDP, CDU/CSU-AfD, and CDU/CSU-AfD-FDP possibilities all assume a working majority.

A coalition of CDU/CSU + AfD + FDP would easily have a majority.

A coalition of CDU/CSU + FDP might not have a majority if SDP continues to gain at the expense of CDU/CSU.

Election Not Over

With many sitting the election out and with many undecided voters likely to vote for someone other than CDU/CSU or SPD, this election is hardly over.

Indeed, the mess gets rather complicated if SPD tops 28% and the Greens and Left come close to 10% each. And that outcome is not out of the question.

Merkel should hope that any CDU/CSU slippage goes to FDP and AfD, not anywhere else.

Is CDU/CSU + AfD that bad an option? I think not, but I do not get to vote.

Mike "Mish" Shedlock

Obama Supporters Sign "Karl Marx for President" Petition

In the following video, Mark Dice, tells passers-by that Obama endorses Karl Marx for president in the 2016 election. People willingly sign a petition to get Karl Marx on the ballot.

Link if video does not play: Communist Karl Marx Endorsed by Obama

Mike "Mish" Shedlock