So much for the boom...

Economist Dean Baker points out why the baby boom has already made its greatest impact on the Social Security fund

In Monday's paper, USA Today reports on a growing backlog of disability cases being processed by the Social Security administration. The article tells us that the aging of the baby boomers is a main cuplrit and the problem will get worse as the boomers continue to age.

Actually, the problem won't get worse, or at least the problem won't get worse because the boomers are aging. Disabled people of working age get disability benefits. When workers hit age 62, they qualify for retirement benefits, whether or not a disability keeps them from working. Over the last decade, most of the baby boomers entered the ages of high disability rates from 50 to 62. Beginning next year, the oldest baby boomers will have reached age 62, the earliest possible age to receive SS retirement benefits. This means the full impact of the wave of aging baby boomers on the disability program should be felt this year. In future years, the burden on the disability program is likely to increase less rapidly.

That is exactly what the Social Security trustees project. From 2002 through 2007, they project that the cost of the disability program will have increased at an average annual rate of 8.6 percent (@ 6.1 percent in real dollars). From 2007 through 2016 they project that the cost will increase at an average annual rate of 5.8 percent (@3.3 percent in real dollars). In other words, the worst effects of aging baby boomers on the disability program have already been felt.