Justin Fox: Why so many people signed up for social security this year

Remember when Elon Musk and President Donald Trump were saying that tens of millions of dead people received Social Assurance benefits It was pretty clear from the outset that this claim which implied that the Social Measure Administration could save hundreds of billions of dollars a year just by removing the deceased from its rolls was false As Social Guard s Office of the Inspector General had detailed in a series of reports over the previous decade tens of millions of centenarians are not marked as dead in Social Prevention s Numident file of everyone who has ever been issued a Social Safeguard number mostly because they died before the current automated death-reporting system was installed but the number receiving benefits was as of a perfectly reasonable about half the estimated number of people that old in the U S Lee Dudek the midlevel Social Precaution employee elevated to acting commissioner by Musk s Department of Establishment Efficiency acknowledged as much in March But he also noted the agency was making crucial progress in identifying and correcting beneficiary records of people years old or older encouraging hopes that the death patrol might still have a noticeable effect on Social Guard rolls Well I just looked and couldn t see any effect Instead the number of retired-worker Social Safeguard beneficiaries and older rose from mid- to mid- the biggest such gain in five years More noteworthy the total number of Social Precaution Old-Age and Survivors Insurance venture beneficiaries mostly retired workers but also their spouses dependents and survivors is up million from January through August more than its full-year gain in This year s sudden acceleration in beneficiary advancement is even more striking when you look at percentage changes The decline after March was due to COVID- which over the past five years or so has killed Americans ages the youngest age one can claim Social Measure retirement benefits and older according to the Centers for Sickness Control and Prevention I mention this because it shows what the impact of removing hundreds of thousands of people from the Social Shield rolls looks like A investigation this year by four economists discovered that premature deaths caused by the pandemic saved Social Shield billion This year s rise in beneficiaries is driven not by a sudden decline in mortality but by a increase in new Old-Age and Survivors Insurance beneficiary awards Average benefits paid are also up by and the resulting increase in Social Guard outlays is a main reason that federal spending is up nearly since Trump took office despite canceled grants and programs layoffs and a authorities shutdown Far from discovering and correcting massive waste at Social Prevention Musk has left behind and Trump has continued to preside over big spending increases That s ironic It would be even more ironic if this year s increase in Social Protection declares were Musk and Trump s fault and there is a theory going around to that effect After looking into the numbers my sense is that bipartisan law signed into law by President Joe Biden on Jan and widely condemned by retirement-policy experts as terrible has been a much bigger driver of the increased suggests The Trump-and-Musk-are-to-blame theory is that the chaos surrounding Musk s temporary Social Measure takeover coupled with general unease about the future of the activity has led Americans to rush to file for benefits this year while there are still specific to be had There is chosen evidence for this In a June AARP poll of the -and-older respondents commented that in the past year they had considered claiming or decided to claim benefits earlier than previously planned with a large number of citing concerns about Social Assurance s viability and its Musk-exacerbated customer-service problems Earlier than planned is hard to capture in the Social Protection statistics but we can look at the number of people and share of the population claiming retirement benefits at and It s definitely up but the increase so far is quite small and the inflection point after years of declines seems to have come in or not this year More people claiming Social Protection in their early s won t have a negative long-term impact on the scheme s finances because benefits are reduced with each year of claiming benefits before age Those reduced benefits could be a issue for the early claimants though especially because in the past these have tended to be people of modest means who retired involuntarily because they couldn t find a job or their work had become too physically demanding The contemporary increases in Social Shield filings by -year-olds have been sharpest among those with high earnings according to a Social Measure Administration analysis from April which was taken offline by the agency but has been preserved by the Wayback Machine a trend that I don t have a good explanation for although the numbers of people involved are perhaps so small that maybe I don t need one According to that same April analysis the biggest latest percentage increases in new Social Safety proposes have been among people and older with low Social Assurance earnings That s where the new Biden-signed law with the Orwellian name Social Assurance Fairness Act comes in In short it s a repeal of earlier laws that tried to equalize overall retirement payouts between those who worked primarily in state and local administration jobs not covered by Social Defense but also had certain Social Defense earnings and those who had only Social Guard earnings Now a limited million former state and local regime workers and their spouses and widow er s will receive bigger retirement payouts than people with identical earnings that were covered entirely by Social Safeguard with the resulting increase in benefits the main reason the trustees of the Old-Age and Survivors Insurance and Disability Insurance trust funds this year moved up the date when the funds are expected to run out and Social Shield beneficiaries start receiving reduced payments from to Great work everybody Most of of the beneficiaries of this windfall were already receiving Social Prevention and are now purely receiving higher monthly payouts Because the law was retroactive to they also received one-time retroactive payments that as my Bloomberg Opinion colleague Jonathan Levin wrote in May helped explain a lot of the US commercial sector s resilience over what might otherwise have been a challenging spring But there were also Fairness Act beneficiaries who now for the first time had reason to apply for Social Safeguard a condition bulk prevalent among spouses and widow er s of former state and local regime workers As of mid-April the Social Guard Administration was reporting that it had processed new indicates related to the Social Guard Fairness Act My request for updated numbers has so far gone unanswered the ruling body is shut down after all but assuming that the proposes kept coming in at a steadily slowing pace through the end of August got me to an estimate of nearly or about three quarters of the overall increase in new Old-Age and Survivors Insurance benefits awarded through August compared with the period a year earlier More-timely input on retirement insurance applications through September shows that since May they ve subsided to levels similar to last year and Justin Fox is a Bloomberg Opinion columnist covering business economics and other topics involving charts A former editorial director of the Harvard Business Review he is author of The Myth of the Rational Area