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Notes -
Copying over a post from the ssc subreddit because I found it interesting. (Hope this is allowed.)
In the mid 2010s there was a crisis around social security disability. Things were so dire that estimates placed the DI reserves to run out by 2016.
And yet as we know, this didn't happen. Part of it was thanks to the Bipartisan Budget Act of 2015, which temporarily reallocated payroll tax revenues from the OAS fund to the DI trust fund but that was temporary and ran out in 2022. And as far as I can tell (and as far as my double checks with the chatbots can find), it wasn't extended.
And now with the upcoming social security crisis the DI reserves are the only part to not be facing any expected issues.
Another piece of the disability crisis, 14 million people were on disability in 2013 and the number was expected to keep rising and rising. And yet it didn't happen, the trend reversed and as of 2024, only around 7 million are on disability It was halved! Substantial drop! We're back to levels from two decades ago.
Why? How did things change so radically so fast?
Covid. I don't know how much of an impact Covid had, but it was disproportionately impacting the disabled both directly and indirectly (by using up hospital resources) and that likely lead to some deaths but it doesn't seem to be that much, we were already trending downwards before the pandemic. [Edit: See edit below, it's quite possible that Covid had a greater impact than I thought]
The social security admin changed up their policies a bit and got more pressure on appeal judges to make denials. This had an impact, but the changes to denial rates don't seem to be that drastic to explain a 50% drop. And since then that small trend downwards has actually reversed too, the overall final award rate of 2024 applications seems to be higher than the mid 2010s average.
I don't think those are the main reasons why it changed.
What do I propose was the main reason? The economy got stronger and the disabled got older.
You can see for yourself how disability applications correspond pretty heavily with the unemployment rate.
Unemployment has a selection bias, it mostly impacts the older, sicker and less educated. Those are people who in a good economy with low unemployment might be able to get jobs, but in a weaker economy they are too old and disabled to find something compared to their healthier younger peers.
You can see a huge surge in disability applications around the time of the great recession. These people were largely in their late 50s and early 60s, too young for early retirement but too old in the recession environment to compete well.
An NPR article from the time reveals this in an example of [in 2009] 56 year old Scott Birdsall and what an employee at a retraining center told him after a local mill closed down and the aging workers were left finding other jobs
A 56 year old in 2009 is what age in 2024? 71. They are past retirement age, and would have transitioned off of disability and onto normal retirement pay.
This is what I think solved a significant portion of the disability crisis. Overall disability in the late aughts and early 2010s was being used as a makeshift early retirement program for uneducated middle aged and senior workers who didn't yet quality for their benefits, but were functionally unemployable already in the post recession economy.
And while I came up with this idea for myself, during research I stumbled onto an analysis that suggests the same thing. Their analysis ended at 2019, where there was still roughly 9.8 million on the rolls, and found that about half the explanation is the business cycle/aging and half is ALJ retraining. The trend from 2019-2024 is likely explained in a similar way, and given the increased final award rates we've tended back towards, this is likely explained even more heavily by the aging explanation.
There are some factors that help support this explanation more. SSDI in general tends to go to older, poorer, more rural and sicker (at least given death rates are 2-6x higher than peers) individuals.
While this does not explain why the 2010s surge itself happened since those factors are relatively stable, it does explain why the surge was so temporary.
This also leads to an interesting question, what happens in the next period of high unemployment? How do we plan to address mass AI based layoffs if they occur?
Many people may be able to find a new job, but many won't and we will likely be facing a new disability crisis if it is forced to served as a early retirement program again.
Edit:
Thinking about it, one weirdness here is Covid unemployment which didn't seem to increase disability rates and in fact the trend downwards continued despite that. But we did see a huge surge in early retirement with about 2.6 million excess retirees. So maybe something changed in how early retirement works since? Or maybe Covid era unemployment mostly impacted younger healthier people or the jobs market for furloughed workers wasn't as bad. Or heck, maybe it's just coincidence that the downward trend was already happening and Covid really did have a major impact on the total number of beneficiaries.
My guess would be in the recovery, Covid unemployment surged higher but recovered really fast so we probably just didn't see as many Scott Birdsall situations.
Back to my thoughts, I'm extremely skeptical that the disability numbers could halve over such a relatively short period without some sort of accounting trickery. I could definitely see Covid having an impact, especially since the vast majority are older people. But the drop in numbers is just too great for me to take them at face value.
We've seen it before with disability, social security, etc, but often times the medicalized benefits system will just shuffle large amounts of people from one category to another once political pressure comes to bear on a label like "disability."
This also reminds me of the old post by Alone on how SSI is basically medicalizing political problems - can't seem to find it but if anyone knows what I'm talking about and has the link that would be great.
Just to get the convo started... wow. I'm reading this NPR article on disability and this is a direct quote:
Ok great, so disability is basically just handouts for people who didn't have the intelligence or wherewhithal to complete college. Got it.
On the one hand I don't think it's necessarily a bad idea to help low IQ folks or those who made poor life choices to some degree - but lets at least make it clear. Hiding it behind this medical idea that they are unable to work is wrong.
Let me argue for the other side: Disability assistance is providing money to those with the inability to financially support themselves. Stephen Hawking did not require disability assistance, despite being significantly disabled, because his intellect provided him the ability to provide for himself. It makes perfect sense to account for intellectual ability if making the holistic judgment on whether someone's net ability makes them employable. Just consider them to be suffering from a mild intellectual disability on top of their physical one.
But, I largely agree that it reaches a degree of ridiculousness. Where does it end? If someone can't hold down a job due being totally lazy and refusing to arrive on time, I guess they're temporally disabled and we owe them our money.
But wait, let me change the above scenario: the person in question has severe fetal alcohol syndrome. Do they deserve disability now? How about a severe head injury yielding the same result? How about they have absolutely no diagnosable issue but just have 1/10,000,000 shit genes for intellect and conscientiousness?
A tangent.
I keep gravitating back towards my own null hypothesis - public welfare is a bad idea through and through, and no matter how many epicycles its proponents attach in attempts to sanewash it, it will never be a better system than not having public welfare. I know this means that I effectively espouse the need to pay out the ass for private insurance, and that there will be a very large parts of the population near the bottom end of the socioeconomic spectrum that will look very disagreeable even to my middle class sensibilities. A low-wage class, a serf class, a dehumanized mass of barely viable specimens, or outright unviable ones kept alive by their barely viable associates, or unviable ones in the process of honest-to-god starving on the streets. But what will the world look like with another few centuries of public welfare and, I assume, no eugenics? The same low-viable population, only grown unchecked by economic pressure thanks to welfare always bailing them out at significant cost to the productive elements of society.
I keep being told that this is baseless, that the unproductive poor will be elevated by education, or that they will naturally stop breeding, or that each subsequent generation is a blank slate and those non-viable traits will not persist over long timeframes. Or, of course, that AI will fix everything for everyone anyways. Or that there's no point in worrying because the planet is doomed and we may at least die in solidarity and upholding basic standards of living and human dignity for everyone on the way.
But I don't see it. I just don't. What I see is ever-growing burdens placed on those who create value, to the benefit of an ever-growing proportion of those who do not. I'd call it injustice if that made sense to anyone nowadays, when "justice" means that those who don't work are sustained by those who do, forever, no strings attached. Until society as a whole produces nothing but parasites and their sustenance - and then either collapses or finally puts a stop to these dynamics, much later and more grievously than had it been done earlier.
"Do you want to see people dying in the streets?", one might ask me. No I don't. Of course not. But it strikes me as quite possibly the lesser evil, in the long run.
I'm not sure why this would be the null hypothesis. Coercively funded public welfare has been around since time immemorial, the consequences of abolishing it have been politically unacceptable even in poorer and harsher times, and members of the manual labour class who can no longer work hard enough to hold down a job due to old age have almost always been seen as the most deserving cases.
Poor relief through the Church in medieval Europe was not voluntary charity - it was institutionalised welfare funded by State-endorsed coercion. In England the system largely operated through the monasteries and there was a combination of real secular coercion (tithes were a compulsory levy which could ultimately be collected by force, and impropriation of rectories by monasteries basically meant that tithes beyond what was needed for the support of the parish priest were diverted to monastic "charity") and spiritual coercion (in a society where people actually believe in a religion which incorporates justification by works, "you will go to hell if you do not leave a reasonable percentage of your net worth to the local monastery" is coercive). In the middle of the 16th century the dissolution of the monasteries and the Reformation mean that this system stops working, and the resulting increase in visible destitution is as politically destabilising as the present-day street-shitting crisis in San Francisco. Eventually England gets a comprehensive system of tax-funded secular poor relief in 1601. The Malthusian turn in the 19th century doesn't change the principle - the workhouses were harsh but they weren't cheap. And "don't put the infirm elderly in the workhouse" was the first demand of left-populists and one of the top five demands of right-populists for most of the next century.
What did change, probably for the worse, was the shift from a poor relief system where who gets what was ultimately at the discretion of local elites who could rely on their own knowledge to distinguish between deserving and undeserving poor to a bureaucratised system. And that change was made by the workhouse-mongers who thought that the local elites were too soft - something that is still an issue in the UK in the present day, where governments of all stripes keep trying to centralise eligibility assessment for disability benefits because patients' own NHS GPs (in the late 20th century, the archetypal local elite) are too soft, particularly in high-unemployment post-industrial areas like the Welsh valleys.
Not the. Just mine.
Fair points on your part. I won't argue against your historical analysis. That said, I still don't think situational barely-subsistence welfare at the discretion of local elites in pre-modern societies corresponds very exactly to universal high-standard-of-living welfare administered by nationally uniform buerocracies in terms of long-term demographic dysgenics.
SSDI abusers are generally past prime reproductive age, so the impact on long-term demographic dysgenics is nearly zero.
The decision to treat never-married single mothers as deserving poor was, in the UK at least, both conceptually and temporally separate from the decision to bureaucratise poor relief. I agree with you that it hasn't produced good outcomes.
Under the Old Poor Law, the deserving poor were generally understood to be:
Wounded or disabled veterans were increasingly considered deserving poor over the course of the 18th century, although they were not legally treated as such by the Poor Law system so if they didn't qualify for the Royal Hospitals at Chelsea (for the Army) or Greenwich (for the Navy) then they often ended up on the streets or in the workhouse.
True. Which is why I prefaced this entire tangent as such; an excuse to ride my hobby horse of the more general public welfare topic.
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