First, it squeezes other government programs. This is already happening. President Obama’s budget assumes that defense spending, as a share of the economy, falls 39 percent from 2011 to 2022. The Army is to drop by 80,000 soldiers, the Marines, 20,000. Domestic “discretionary” spending is cut even more, 45 percent. Research, education, transportation, law enforcement and other programs face pressures.
Second, it undermines work incentives. This, too, is occurring. Social Security’s eligibility ages influence retirement. If eligibility were higher, people would work longer. Eberstadt thinks that relaxed disability requirements have lowered work effort. In 2011, about 4.5 percent of working-age adults (20-64) received Social Security disability benefits, up from 1.3 percent in 1970.
Finally, there’s a moral cost. It encourages “gaming” the system to maximize benefits. It devalues the ethic of “earned success.” There’s tension between helping the truly needy and fostering dependence on government and helplessness.