“We have a safety net,” says Mitt Romney, describing why he doesn’t care about the 46.2 million Americans in record-high poverty due to Barack Obama’s economic policy. “If it needs repair,” he says, “I’ll fix it.”
But what Romney fails to understand about the economy is that the poverty is a symptom of how badly America’s safety net is already in need of repair.
The labor force participation rate, the percentage of Americans working or looking for jobs, fell to 63.7% in January 2012 from 65.7% three years earlier, according to the Department of Labor (see figure). January marked a new low for the measure, which has fallen to its lowest point in 30 years under Obama’s administration.
Not only can falling participation in America’s labor force — with more people relying on a safety net already filled to capacity – hurt sidelined workers and their families. It’s also a danger to the broader economy: a growing safety net requires more government spending to maintain, thus running the risk of increasing the deficit.
Workers who fall out of the labor force tend to rely on a safety net in the form of Social Security Disability Insurance (SSDI), a program they often remain on for the rest of their lives, according to The Economist.
The lifetime cost of disability benefits is significant. By recent estimates, a shift of just 200,000 unemployed workers to SSDI could entail an increase in government lifetime costs of up to $24 billion.
By fixing the safety net on which a record-high number of Americans now depend to meet their basic needs, we can inspire the many with a real possibility of achieving middle-class dignity while growing the economy to restore American supremacy for posterity.
We have not yet begun to succeed.