Spending on safety net programs such as Social Security and Medicare continues to grow even as their trust funds face the prospect of being depleted in the next 10 years.

“Also boosting deficits are two underlying trends: the aging of the population and growth in federal health care costs per beneficiary,” Mr. Swagel said. “Those trends put upward pressure on mandatory spending.”

The national debt is likely to be even larger than the budget office is predicting, as its forecast assumes that the 2017 tax cuts that Republicans enacted will fully expire even though lawmakers are already considering extending many of the measures, including lower individual income tax brackets.

For the second time in less than a year, the budget office said it now expected Mr. Biden’s efforts to wean the nation from fossil fuels to be more popular with the public — and more expensive for taxpayers — than initially estimated.

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New: U.S. Debt on Pace to Top $54 Trillion Over Next 10 Years w/ @jimtankersley https://t.co/VZ9wDWn5l2

— Alan Rappeport (@arappeport) February 7, 2024

Black Swan author Nassim Nicholas Taleb said the US deficit is swelling to a point that it would take a miracle to reverse the damage.

“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he said Monday night at an event for Universa Investments, the hedge fund firm he advises. “And a debt spiral is like a death spiral.”

Taleb defined the ballooning debt load as a “white swan,” a risk that’s more probable than a surprise “black swan” event. While he didn’t identify specific outcomes in markets, he did say white swans include both the US deficit and an economy that’s far more vulnerable to shocks than in prior years.

The reason for that, he said, is that the world is far more interconnected due to globalization, with issues in one region able to ricochet around the world.

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Black Swan author Nassim Nicholas Taleb says as long as you have a government continually extending the debt limit and doing deals because they're afraid of the consequences of doing the right thing, then eventually you're going to have a debt spiral. https://t.co/pQFrtVNqus

— Ben Woodward, CFA (@BennettWoodman) January 31, 2024

In a year when the US economy exceeded almost everybody’s expectations, the underlying federal deficit roughly doubled, spotlighting a dire fiscal trajectory likely to only worsen the partisan budget battles in Washington.

The government ran a $2.02 trillion deficit for the fiscal year through September, after adjustments to remove the impact of President Joe Biden’s student-loan forgiveness program, which was scotched by the Supreme Court. The gap is $1.02 trillion more than the prior year.

The surge is a powerful illustration of a fiscal path that’s triggered warnings from economists, politicians and credit rating agencies. It also helps explain why yields on longer-term US Treasuries are reaching highs unseen since before the global financial crisis, with the government needing to issue ever more debt to cover the shortfall of revenues relative to spending. Ten-year yields surpassed 5% on Monday.

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The US government had a $2 trillion budget deficit for the fiscal year through September, a gap that's $1 trillion more than the prior year. https://t.co/M69cTCs6Yl pic.twitter.com/LMOoK3Nxen

— Lisa Abramowicz (@lisaabramowicz1) October 24, 2023

When it comes to the size of the federal government’s annual deficit, appearances can be deceiving.

The gap between spending and revenue for fiscal year 2023, which ended on Sept. 30, was $1.7 trillion, the Congressional Budget Office projected ahead of the official Treasury Department figures. That would be a roughly $300 billion widening in the shortfall from fiscal year 2022.

But the gap was actually much larger. That is because of the odd way President Biden’s attempt to broadly cancel student debt shows up in budget figures.

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The Federal Deficit Is Even Bigger Than It Looks: Student-debt cancellation complicates the numbers as higher interest rates make borrowing costlier https://t.co/UnnEwiCbb6 pic.twitter.com/WqwpDVfUfn

— Jesse Felder (@jessefelder) October 13, 2023

But the biggest consequences will be for the biggest borrower — namely the US government. As Greg Ip put it in Thursday’s Wall Street Journal, “Rising Interest Rates Mean Deficits Finally Matter.” It is no coincidence, he argued, that “the recent rise in bond yields came as Fitch Ratings downgraded its US credit rating, Treasury upped the size of its bond auctions, analysts began revising upward this year’s federal deficit, and Congress nearly shut down parts of the government over a failure to pass spending bills.”

US fiscal policy has long been on an unsustainable trajectory — for more than 20 years, in fact. But under President Joe Biden it has jumped the shark. The federal deficit looks like it will exceed 7% of GDP in fiscal 2023, after the Congressional Budget Office adjusts for the vagaries of policy on student debt forgiveness. That is a truly shocking number for an economy that is running at close to full employment. And, as I pointed out here a month ago, there is no scenario the CBO can devise in which the total debt relative to GDP does not keep growing, with spending driven up partly by the rising burden of interest payments.

The key problem, as Brian Riedl of the Manhattan Institute has pointed out, is that the average maturity of the federal debt is just 76 months. So even if the CBO is right, and long-term interest rates average 4% over the next three decades, the result will still be budget deficits rising to 10% of GDP. And each additional percentage point on interest rates would add an additional $2.8 trillion of debt service costs over 10 years.

This disastrous outcome is a perfect illustration of the law of unintended consequences.

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“In terms of total returns, this is the biggest bond market rout in 150 years.”https://t.co/ufQO76ioX6 via @opinion

— Bruce Mehlman (@bpmehlman) October 10, 2023

It is sobering to think that the US federal government was running a large budget surplus in 2000 and the gross debt ratio was 54pc of GDP.

A quarter of a century later the ratio is 120pc and vaulting past the 1945 peak. This is partly due to two big recessions and Covid, to be sure, but mostly due to three sets of unfunded tax cuts, two unfunded 21st-century wars and no serious effort to control ballooning middle-class entitlements.

David Kelly from JP Morgan says the US is looking at annual fiscal deficits of $2 trillion this year, next year, and as far as the eye can see. This is at a time of effectively full employment and what should be bumper tax revenues. The deficit could hit $3.5 trillion in the next downturn.

The US Treasury must roll over $8 trillion of existing debt and raise $2 trillion of fresh debt this fiscal year, even as the Fed tosses another $1 trillion onto the heap under its QT programme.

Investors have belatedly, and suddenly, woken up to the shocking implications of a structural budget deficit heading for 8pc of GDP even before any trouble starts. It is this that has driven up yields on US Treasuries by 100 basis points since July.

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If rates continue to rise the way that they’ve been rising, eventually there’s going to be a financial accident, eventually something will break, said JP Morgan’s David Lebovitz on Bloomberg Surveillance. https://t.co/ZsQ8NfcD3n must-read. we thank AEP & David Lebovitz @jpmorgan

— tom keene (@tomkeene) October 7, 2023

The unexpected deficit surge, which comes amid signs of strong growth in the economy overall, is likely to shape a fierce debate on Capitol Hill about the nation’s fiscal policies as lawmakers face a potential government shutdown this fall and choices over trillions of dollars in expiring tax cuts. The Senate will return this week from August recess, and the House will be back the following week. Biden and House Speaker Kevin McCarthy (R-Calif.) approved a deal in June to raise the nation’s borrowing limit, but it did little to alter the long-term debt trajectory.

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🇺🇸 U.S. deficit explodes even as economy grows – Washington Posthttps://t.co/IAXBFZ66WK pic.twitter.com/AEnOvk8hVP

— Christophe Barraud🛢🐳 (@C_Barraud) September 4, 2023

President Biden scored an early political point this month in his fight with congressional Republicans over taxes, spending and raising the federal debt limit: He forced Republican leaders to profess, repeatedly, that they will not seek cuts to Social Security and Medicare.

In the process, Mr. Biden has effectively steered a debate about fiscal responsibility away from two cherished safety-net programs for seniors, just as those plans are poised for a decade of rapid spending growth.

New forecasts from the nonpartisan Congressional Budget Office, released on Wednesday, showed Medicare and Social Security spending growth rapidly outpacing the growth in federal tax revenues over the next 10 years. That is the product of a wave of baby boomers reaching retirement age and beginning to tap the programs, which provide guaranteed income and health insurance from the time benefits are claimed until death.

Those retirees are an electoral force. In refusing to touch so-called entitlement programs, Mr. Biden was appealing to seniors, along with generations of future retirees, when he used his State of the Union address and subsequent speeches this month to amplify attacks on Republican plans to reduce future spending on Social Security and Medicare or potentially sunset the programs entirely.

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A healthy country would tackle this program head on and make the necessary adjustments and compromises to do so 4/4 https://t.co/bjLzztGF23 #socialsecurity #medicare #unfundedliabilities #usa #Stewardship all we are doing now is making things worse for those who come after us

— Kendall Harmon (@KendallHarmon6) February 16, 2023

The federal government’s debt has risen from less than 40% of GDP a decade ago to 78% now, and the Congressional Budget Office (CBO) predicts that the ratio will rise to 96% in 2028. Because foreign investors hold the majority of US government debt, this projection implies that they will absorb more than $6 trillion in US bonds during the next ten years. Long-term interest rates on US debt will have to rise substantially to induce domestic and foreign investors alike to hold this very large increase.

Why is this happening? Had last year’s tax legislation not been enacted, the 2028 debt ratio would still reach 93% of GDP, according to the CBO. So the cause of the exploding debt lies elsewhere.

The primary drivers of the deficit increase over the next decade are the higher cost of benefits for middle-class older individuals. More specifically, spending on Social Security retirement benefits is predicted to rise from 4.9% of GDP to 6%. Government spending on health care for the aged in the Medicare program – which, like Social Security, is not means tested – will rise from 3.5% of GDP to 5.1%. So these two programs will raise the annual deficit by 2.7% of GDP.

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The U.S. debt burden may soon be in the same league as that of Italy, Greece, & Portugal, with or without the recently-passed tax cuts. https://t.co/CpwIFWux94

— Paul Banura (@pbanura) May 29, 2018

A picture with SO many implications…. #economy #politics #demographics #babyboomers #entitlements #budget #generationalconflict pic.twitter.com/zOhjr9BFWN

— Kendall Harmon (@KendallHarmon6) October 12, 2017

Mr. [John] Cogan has just written a riveting, massive book, “The High Cost of Good Intentions,” on the history of entitlements in the U.S., and he describes how in 1972 the Senate “attached an across-the-board, permanent increase of 20% in Social Security benefits to a must-pass bill” on the debt ceiling. President Nixon grumbled loudly but signed it into law. In October, a month before his re-election, “Nixon reversed course and availed himself of an opportunity to take credit for the increase,” Mr. Cogan says. “When checks went out to some 28 million recipients, they were accompanied by a letter that said that the increase was ‘signed into law by President Richard Nixon.’ ”

The Nixon episode shows, says Mr. Cogan, that entitlements have been the main cause of America’s rising national debt since the early 1970s. Mr. Trump’s pact with the Democrats is part of a pattern: “The debt ceiling has to be raised this year because elected representatives have again failed to take action to control entitlement spending.”

A faculty member at Stanford’s Public Policy Program and a fellow at the university’s Hoover Institution, Mr. Cogan, 70, is one of those old-fangled American men who are always inclined to play down their achievements. The latest of his is the book that draws us together in conversation. To be published later this month by Stanford University Press, it is a 400-page account of how federal entitlement programs evolved across two centuries “and the common forces that have been at work in causing their expansion.”

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Yes, this country can handle the nearly $600 billion federal deficit estimated for 2016. But the deficit has grown sharply this year, and will keep the national debt at about 75 percent of the gross domestic product, a ratio not seen since 1950, after the budget ballooned during World War II.

Long-term, that continued growth, driven by our tax and spending policies, will create the most significant fiscal challenge facing our country. The widely respected Congressional Budget Office has estimated that by midcentury our debt will rise to 140 percent of G.D.P., far above that in any previous era, even in times of war.

Unfortunately, despite a brief discussion during the final presidential debate, neither candidate has put forward a convincing plan to restrain the growth of the national debt in the decades to come.

Read it all. For a very important background on this, please see this 2011 post and the comments thereon, in which Boston University’s Laurence J. Kotlikoff makes clear that the true figure of our actual indebtedness is in excess of 200 Trillion dollars–KSH.

But much more important is the steep upward trajectory of our long-term debt ”“ which remains as dangerous as ever. In its latest long-term outlook, released in June, CBO projected that the federal debt will climb to 141 percent of GDP by 2046 ”“ by far the highest level on record.

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The panel, which included doctors, nurses, insurers, religious leaders, lawyers and experts on aging, said Medicare and other insurers should create financial incentives for health care providers to have continuing conversations with patients on advance care planning, possibly starting as early as major teenage milestones like getting a driver’s license or going to college.

It called for a “major reorientation and restructuring of Medicare, Medicaid and other health care delivery programs” and the elimination of “perverse financial incentives” that encourage expensive hospital procedures when growing numbers of very sick and very old patients want low-tech services like home health care and pain management.

And it said that medical schools and groups that accredit and regulate health providers should greatly increase training in palliative care and set standards so that more clinicians know how to compassionately and effectively treat patients who want to be made comfortable but avoid extensive medical procedures.

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When 83-year-old Maybell Prewette spent one night in an Eden, N.C., hospital a few years ago because she felt dizzy, she was stunned to find out that a couple puffs of allergy nasal spray cost her more than $600.

Medicare didn’t cover the prescription because Prewette was never admitted as a patient at the hospital.

Instead, she was kept overnight for observation. The federal Medicare program doesn’t cover the cost of drugs self-administered by “observation status” patients.

Prewette called her local pharmacy after she was discharged and discovered it charges $30 for the same nasal spray. The hospital marked the medicine up 2,000 percent.

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In the first large-scale study to directly measure wasteful spending in Medicare, researchers found that Medicare spent $1.9 billion in 2009 for patients to receive any of 26 tests and procedures that have been shown by empirical studies to offer little or no health benefit.

By analyzing Medicare claims data, researchers in the Harvard Medical School Department of Health Care Policy found that at least one in four Medicare recipients received one or more of these services in 2009. What’s more, those 26 services are just a small sample of the hundreds of services that are known to provide little or no medical value to patients in many circumstances.

“We suspect this is just the tip of the iceberg,” said study author J. Michael McWilliams, associate professor of health care policy. The study appears today in JAMA Internal Medicine.

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We start with this reality: Social Security and Medicare are practically sacrosanct. Nearly nine-in-ten Americans say they’re good for the country. That’s an amazing number. But the popularity of these programs really isn’t all that surprising. People love them because they do what they were created to do. They ease many of the frets and dreads of old age ”“ a blessing not just for seniors but for everyone who loves, supports and depends on seniors. Which is to say, everyone.

But the status quo is unsustainable. Some 10,000 Baby Boomers will be going on Social Security and Medicare every single day between now and 2030. By the time everyone in this big pig-in-the-python generation is drawing benefits, we’ll have just two workers per beneficiary ”“ down from three-to-one now, five-to-one in 1960 and more than forty-to-one in 1945, shortly after Social Security first started supporting beneficiaries.

The math of the 20th century simply won’t work in the 21st. Today’s young are paying taxes to support a level of benefits for today’s old that they have no realistic chance of receiving when they become old. And they know it ”“ just 6% of Millennials say they expect to receive full benefits from Social Security when they retire. Fully half believe they’ll get nothing.

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Treasury Secretary Jacob J. Lew warned Congress on Wednesday that the government would most likely exhaust its ability to borrow in late February, setting up yet another fiscal showdown with Republicans, and this time earlier than congressional leaders had anticipated.

In a letter to Speaker John A. Boehner and the other top three congressional leaders, Mr. Lew said a surge of February spending, mainly tax refunds for 2013, would leave the Treasury with little room to maneuver after the official debt limit is reached on Feb. 7.

The letter amounts to an early alarm bell, coming just weeks after Congress passed its first bipartisan budget and comprehensive spending bill in years. Those bills were supposed to serve as a cease-fire in the budget wars that have rattled the country and the economy since Republicans took control of the House in 2011.

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True to their “live to work” reputation, some baby boomers are digging in their heels at the workplace as they approach the traditional retirement age of 65. While the average age at which U.S. retirees say they retired has risen steadily from 57 to 61 in the past two decades, boomers — the youngest of whom will turn 50 this year — will likely extend it even further. Nearly half (49%) of boomers still working say they don’t expect to retire until they are 66 or older, including one in 10 who predict they will never retire.

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While plenty of baby boomers, born from 1946 to 1964, have become affluent and many elderly around the U.S. face financial hardship, the wealth disparity of this father and daughter is emblematic of a broad shift occurring around the country. A rising tide of graying baby boomers is less secure financially and has a lower standard of living than their aged parents.

The median net worth for U.S. households headed by boomers aged 55 to 64 was almost 8 percent lower, at $143,964, than those 75 and older in 2011, according to Census Bureau data. Boomers lost more than other groups in the stock market and housing bust of 2008, and many also lost their jobs in the aftermath at a critical point in their productive years.

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But there’s a problem. [Charles] Lindblom’s common-sense insight has a giant exception: crises. Change, forced by outside events, then happens by “leaps and bounds.” The recent financial crisis caused Congress and two presidents to embrace measures (the rescue of big banks, General Motors and Chrysler) that were unthinkable a few months earlier. In the 1960s, civil rights demonstrations pushed Congress to pass the Civil Rights Act of 1964 that, in outlawing most public racial discrimination, wasn’t “incremental.” History offers other examples, including the Civil War, the New Deal and both World Wars. Small changes won’t suffice when big changes are required.

On the budget, muddling through comes with a crucial assumption. It is that continuous deficits won’t provoke a crisis that compels political leaders to take harsh steps that they would otherwise not take. This optimism may be justified. For decades, “experts” have warned of the dire consequences of unchecked deficits. Yet no great crisis has occurred. But this conviction also could be complacency. Government debt is in territory that, except for wartime debt, is unprecedented. We don’t know the consequences. Someday, we may no longer have the luxury of muddling through.

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No one wants to be against Grandma, who ”” as portrayed in the media ”” is kindly, often suffering from some condition, usually financially precarious and somehow needy. But projecting this sympathetic portrait onto the entire 65-plus population is an exercise in make-believe and, frequently, political propaganda. The St. Louis Fed study refutes the stereotype. Examining different age groups, it found that since the financial crisis, incomes have risen for the elderly while they’ve dropped for the young and middle-aged.

The numbers are instructive. From 2007, the year before the financial crisis, to 2010, median income for the families under 40 dropped 12.4 percent to $39,644. For the middle-aged from 40 to 61, the comparable decline was 11.9 percent to $56,924. Meanwhile, those aged 62 to 69 gained 12.3 percent to $50,825. For Americans 70-plus, the increase was 15.6 percent to $31,512. (All figures adjust for inflation and are in 2010 “constant” dollars. The “median income” is the midpoint of incomes and is often considered “typical.”)

There has been a historic shift in favor of today’s elderly. To put this in perspective, recall that many family expenses drop with age. Mortgages are paid off; work costs vanish; children leave. Recall also that incomes typically follow a “life cycle”: They start low in workers’ 20s, peak in their 50s, and then decline in retirement, as wages give way to government transfers and savings. Against these realities, the long-term gains of the elderly and losses of the young are astonishing. From 1989 to 2010, median income increased 60 percent for those aged 62 to 69 while falling 6”‰percent for those under 40 and 2”‰percent for those 40 to 61.

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1–A constant battle is underway between insurance companies that do not want to pay any claims, even legitimate ones, and doctors and hospitals incentivised to rip off patients, insurers, and taxpayers with unnecessary surgeries and Medicare fraud.

2–Insurance companies demand massive amounts of paperwork out of rational fear of fraud and unnecessary treatments. Doctors perform for-profit (as opposed to for-patient) procedures that guarantee more explanations and more paperwork.

3–Doctors and hospitals have direct personal contact with patients, but insurance companies don’t. In cases where doctors put patients at huge risk with needless procedures and surgeries, it’s easy for hospitals and doctors to point their finger at insurance companies. On the other hand, many sincere, honest doctors have difficulty getting patients the care they should have because insurers believe they are getting ripped off by unnecessary procedures, even when they aren’t….

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The bishops might have been promoting a strictly Democratic line, but U.S. Senate Chaplain Barry Black was more ecumenical. Amid the shutdown, Rev. Black offered a daily prayer in the Senate chamber asking God to “save us from the madness. We acknowledge our transgressions, our shortcomings, our smugness, our selfishness, and our pride.” Later he condemned the “hypocrisy of attempting to sound reasonable while being unreasonable.” His listeners in one party no doubt assumed he was talking about the other side.

It is one thing to spiritually shame politicians, as Rev. Black did. Trying to do their jobs is another. The bishops and other clergy in the Circle of Protection go well beyond their competencies when they make such policy prescriptions. Speaking about the moral issues of the day is certainly within their pastoral purview, but the bishops’ calls to raise revenues (aka taxes), for instance, or eliminate “unnecessary” military spending are not.

Bishops routinely assert their authority as “pastors and teachers,” as Bishops Blaire, Gomez and Pates did, but according to the tradition of their own church, they have no teaching authority when it comes to politics.

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Stan Druckenmiller makes an unlikely class warrior. He’s a member of the 1%””make that the 0.001%””one of the most successful money managers of all time, and 60 years old to boot. But lately he has been touring college campuses promoting a message of income redistribution you don’t hear out of Washington. It’s how federal entitlements like Medicare and Social Security are letting Mr. Druckenmiller’s generation rip off all those doting Barack Obama voters in Generation X, Y and Z.

“I have been shocked at the reception. I had planned to only visit Bowdoin, ” his alma mater in Maine, he says. But he has since been invited to multiple campuses, and even the kids at Stanford and Berkeley have welcomed his theme of generational theft. Harlem Children’s Zone President Geoffrey Canada and former Federal Reserve Governor Kevin Warsh have joined him at stops along the tour.

Mr. Druckenmiller describes the reaction of students: “The biggest question I got was, ‘How do we start a movement?’ And my answer was ‘I’m a 60-year-old washed-up money manager. I don’t know how to start a movement. That’s your job. But we did it in Vietnam without Twitter and without Facebook and without any social media. That’s your job.’ But the enthusiasm””they get it.”

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Standard & Poor’s is only raising half a cheer at the deal:

“We believe that to date, the shutdown has shaved at least 0.6 per cent off of annualised fourth-quarter 2013 GDP growth, or taken $24bn out of the economy.

“The short turnround for politicians to negotiate some sort of lasting deal will probably weigh on consumer confidence, especially among government workers that were furloughed. If people are afraid that the government policy brinkmanship will resurface again, and with it the risk of another shutdown or worse, they’ll remain afraid to open up their cheque books. That points to another Humbug holiday season.”

Read it all (if necessary another link is there).

Top Senate leaders on Monday said they were within striking distance of a deal to sidestep a looming debt crisis and reopen the federal government two weeks after a partisan deadlock forced it to close.

Fourteen days after a partial government shutdown began, senators signaled a bipartisan resolution could come soon.

“I’m very optimistic we will reach an agreement that’s reasonable in nature this week to reopen the government, pay the nation’s bills and begin long-term negotiations to put our country on sound fiscal footing,” Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor.

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…it is still foolish to ignore the leverage that the individual mandate gives opponents of Obamacare. America’s healthcare system for the elderly (Medicare, plus Medicaid for nursing-home care) is already edging the country toward generational war because Washington will sooner or later be forced to choose between drastic limitations on coverage in those programs or drastic increases in taxes on the decreasing portion of working Americans. Now we’re adding a parallel obligation on younger workers to subsidize healthcare for fiftysomethings.

What to do? The path of least political resistance is to tough it out, hoping younger households will be unable to figure out what’s happening, or simply unwilling to throw in their lot with opponents of gay marriage, marijuana reform and the like. Alternatively, we could start paying attention to the building crisis as younger households scramble ever harder for a middle-class living standard.

And none too soon, because the signs of generational conflict are already appearing.

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Asthma ”” the most common chronic disease that affects Americans of all ages, about 40 million people ”” can usually be well controlled with drugs. But being able to afford prescription medications in the United States often requires top-notch insurance or plenty of disposable income, and time to hunt for deals and bargains.

The arsenal of medicines in the Hayeses’ kitchen helps explain why. Pulmicort, a steroid inhaler, generally retails for over $175 in the United States, while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients. Albuterol, one of the oldest asthma medicines, typically costs $50 to $100 per inhaler in the United States, but it was less than $15 a decade ago, before it was repatented.

“The one that really blew my mind was the nasal spray,” said Robin Levi, Hannah and Abby’s mother, referring to her $80 co-payment for Rhinocort Aqua, a prescription drug that was selling for more than $250 a month in Oakland pharmacies last year but costs under $7 in Europe, where it is available over the counter.

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….the Federal Disability Insurance Program…serves nearly 12 million people — up 20 percent in the last six years — and has a budget of $135 billion. That’s more than the government spent last year on the Department of Homeland Security, the Justice Department, and the Labor Department combined. It’s been called a “secret welfare system” with it’s own “disability industrial complex,” a system ravaged by waste and fraud. A lot of people want to know what’s going on. Especially Sen. Tom Coburn of Oklahoma.

Tom Coburn: Go read the statute. If there’s any job in the economy you can perform, you are not eligible for disability. That’s pretty clear. So, where’d all those disabled people come from?

The Social Security Administration, which runs the disability program says the explosive surge is due to aging baby boomers and the lingering effects of a bad economy. But Sen. Tom Coburn of Oklahoma, the ranking Republican on the Senate Subcommittee for Investigations — who’s also a physician — says it’s more complicated than that. Last year, his staff randomly selected hundreds of disability files and found that 25 percent of them should never have been approved — another 20 percent, he said, were highly questionable.

Read it all or better still watch the video.