Just a couple of days ago I saw an interesting article posted. It was on Social Security and this year’s cost of living adjustment (COLA). Actually, this year there will be no cost of living adjustment for the second year in a row.
WASHINGTON — As if voters don’t have enough to be angry about this election year, the government is expected to announce this week that more than 58 million Social Security recipients will go through another year without an increase in their monthly benefits. In times like these, it is but normal to have questions about social security and the benefits that you can reap after retirement, which is when social security office locator comes into the picture. They have answers to all your queries.
It would mark only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year.
“If you’re the ruling party, this is not the sort of thing you want to have happening two weeks before an election,” said Andrew Biggs, a former deputy commissioner at the Social Security Administration and now a resident scholar at the American Enterprise Institute.
“It’s not the congressional Democrats’ fault, but that’s the way politics works,” Biggs said. “A lot of people will feel hostile about it.”
The cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was adopted by Congress back in the 1970s. Based on inflation so far this year, the trustees who oversee Social Security project there will be no COLA for 2011.
Needless to say, there were the requisite interviews with several retired people bemoaning how this would mean cutbacks for them and how they would have less to spend, etc. There were even comments about how Congress is “using” them to balance the budget. But, here is the problem I have. First, let me comment that I am 59 and retirement is not that far away from me. The problem that I have is that, as the article mentions, Congress has NOTHING to do with COLA adjustments. The reason why Congress divested itself in the 1970’s of adjustments to Social Security is because it was, and is, such a political hot potato. In this way, they hoped that a more rational way to adjust Social Security would settle the arguments.
But, rationality has nothing to do with the current political climate. The reality is that COLA adjustments are calculated based on various economic measurements to ensure that the adjustments are, ahem, fair and balanced. But, of course, people on Social Security have become accustomed to yearly raises. Yet, this is the second year that there is no COLA raise because the recession has meant no increase in the overall calculated living costs. That is, while some costs have gone up, other costs have gone down. So, in the overall economic balance, there has been no inflation. No inflation means no COLA adjustment. And, guess what, all the Tea Party rhetoric is quickly flying out a window.
Frankly, would you not expect that the Tea Party supporters, who have been so busy complaining about unjustifiable government spending, would fully support the second year of no COLA increase, particularly since it is based on rational economic calculations? Would you not expect that the retired folk, who turned out last year to scream at any candidate who supported health care reform because it was too costly, would also support this rational limiting of increased spending? Well, you would, but, of course, it is easy to scream about waste until you are the one who, uhm, does not have additional government money wasted on them. Then you suddenly want the government to give you more money, even though there is no rise in the overall cost of living. That this extra unmerited handout would come from taxes, and would further destabilize the budget is irrelevant. Show me the money!
So, I am waiting. Let’s see how long it takes for the Tea Party folk to fully support the rational decision to not spend unnecessary government money. given that the calculations show no overall cost of living increase. Don’t hold your breath. Everyone talks about needless government spending, that is, until it applies to them. Then suddenly it does not seem quite as unnecessary, does it? I really really hope that I am wrong, because if I am wrong, it would say that perhaps there are some people involved in politics who are consistent. But, I am not holding my breath. My prediction? Tea Party members will cave on their principles and insist on a COLA increase to Social Security regardless.
Older Tea Party members may gripe, but younger ones know that the Social Ponzi scheme will collapse before they hit retirement age (or the retirement age will be bumped up to 100).
What’s amazing is that the people who have worked their entire life and have paid in to all of these programs are now the bad guys. Let me get this straight. If you’ve always paid, you deserve nothing and if you’ve lived off the government, you should get everything. The people like myself who have worked hard for what they have should feel guilty? Obamaism at it’s finest. And just where would you have been without us?
Socialism works…. until you run out of other peoples money.
I fail to see what this has to do with President Obama. Social Security predates him by decades. The formula to calculate COLA comes from when he was 13 years old. Neither the President nor the Congress have any control over COLA increases. Please go back in history and see that the formula for calculating COLA was approved during a REPUBLICAN presidency as a means of fiscal control. So, how is this Obamaism at its finest? You are stretching quite a bit to reach that conclusion!
And, since retirees are receiving Social Security, that does not sound like they are receiving nothing. But, does paying into the program your whole life entitle you to ungoverned increases in what you get? Or are you suggesting that retirees should get a yearly increase regardless of inflation (or deflation) in the economy?
Father,
My google-fu may be weak, but I don’t see the Tea Parties making much noise about this.
Re “Socialism works…. until you run out of other peoples money.”
I have seen this in emails and on bumper stickers, even from Christians. The thing that surprises me most is the misunderstanding that it is not other people’s or our money.
It is the Lord’s money. He owns the cattle on a thousand hills (all hills and all cattle and everything in and on the earth). We are stewards only.
We need to keep this in mind when we make these arguments and we are called to give alms to the poor.
Perhaps we don’t need government socialism, but we do need more church “socialism”. The widow gave all she had.
I may be wrong, but I think a great many of these Tea Party folks are former sixties radicals who now have come full circle. Back then, as now, the main issue, it seems, is self-interest, the difference being that, back in the day, what was good for the young baby-boomers was also good for the rest of society. Today that is not necessarily the case (although I do think that many Tea Partiers, regardless of age, are justifiably angry at seeing their standard of living erode. They are merely directing their anger in the wrong direction).
The quote about socialism is problemmatic for several reasons. One is that it assumes that possession of wealth necessarily implies legitimate ownership. Another problem is that it also assumes that “socialism” refers primarily to the redistribution of wealth when in fact, the basic concept has to do with who controls the means of production. In capitalism, there is no necessary connection between being a worker and controlling the production process as well as the distribution of what is produced, return on investment, etc. Ownership, that is, capital, is rewarded before labor. Socialism is first and foremost about the notion that those who do the work should control the process and be rewarded first. It is literally a matter of labor over capital and people before profits. Obviously these two problems are related.
This comment:
it is easy to scream about waste until you are the one who, uhm, does not have additional government money wasted on them. Then you suddenly want the government to give you more money.
Goes back to when you told me how all of a sudden everyone becomes a socialist when they need money. Everyone you complain about seems to be those that have worked hard all of their lives. And from what I’ve read, Obama wants to make cuts on the elderly.
I don’t know that Obama does, Patricia. However, there are those that do, and from I can have heard, they are largely Republican. At the same time, no politician is crazy enough to try to introduce cuts that take effect any time soon.
Here is the basic problem: since 1980 or thereabouts, productivity in this country has increased signficantly, maybe doubled or more. However, virtually all of the wealth produced by that drastic increase in productivity has gone to those at the very top of the economic foodchain. For everyone else, income has either stagnated or actually gone down (adjusted for inflation). This has been exacerbated by the changes in the tax code, beginning with Reagan, most recently with the last President Bush. Because of this, inequality of income and of wealth acquisition in general has skyrocketed, such that as of now, those at the very top are bringing in a few hundred times (literally) what those at the very bottom are (as opposed to the rest of the world, where a difference of 50x between top and bottom is considered high).
Questions of justice aside, it is this kind of economic dynamic is unsustainable. Here is how G.K. Chesterton put it: “Capitalism is contradictory as soon as it is complete; because it is dealing with the mass of men in two opposite ways at once. When most men are wage-earners, it is more and more difficult for most men to be customers. For the capitalist is always trying to cut down what his servant demands, and in doing so is cutting down what his customer can spend … He is wanting the same man to be rich and poor at the same time.”
Thus, capitalism, without government intervention or freewheeling credit, is inherently unsustainable. So, for example, the U.S. economy was in recession or depression fully 40% of the time between 1853 and 1953. So the issue then becomes, what to do? Keynesianism primes the pump through government borrowing and spending, so both strategies come down to the same thing, borrowing. One answer, which is primarily distributivist, but can also be seen as socialist in an anarchic sort of way, is to distribute productive property, primarily in terms of worker cooperatives, as widely as possible. For more on the distributivist solution, see John Medaille’s new book, “Toward a Truly Free Market.” I don’t agree with all of his solutions when it comes to government policy, such as eliminating the Federal Reserve, but his analysis of capitalism is absolutely correct as is, IMHO, the distributivist co-operative idea when it comes to forming large enterprises.
This is too political for me–I will just keep tithing and giving extra money to charities I feel are doing good things. I will just keep loving my neighbors and trying to help people when I can. I will just be a listening ear to those who are going through hard times and keep praying. I will just keep giving an extra sandwich or loaf of bread to someone when I have two and they have none–or even cut it in half and we each have half. If everyone did the same, the government would not have to–however if everyone does not….well….what can I say….we shouldn’t spend money we don’t have, but I think we often spend money on what we don’t need (personally and governmentally…..)
I speak as a retired VA nurse (who gets a retirement check from the US Treasury) who made the choice early in my career to take less money at the time than I could have gotten from the private sector–a lot less when I first started my career–to serve those who had served us with their life’s blood. I do feel that I gave a lot for that check as did the disabled vets and the retired military who also get a government check–and remember those men and women were on duty 24/7 and in harm’s way in an instant at the call of the government. VA Nurses are also supposed to be on duty 24/7, cannot work outside of the VA in a part time job and have to be available when called–such as when there were blizzards and we worked around the clock–plus work even when not getting paid as one year when the budget did not pass congress and we worked without a check…..
No easy answers, I think….but more common sense would help…and less name-calling….I mean we all were taught in kindergarten not to call names or hit or throw sand–to share the toys and to pick up when we were done.
Alix
You may be right about the Tea Party folks but at this point I’m not sure that their directing anger in the wrong direction. I don’t necessarily disagree with cutting back the size of government, reducing wasteful spending and the federal budget deficit. Everything nowadays has special strings attached. Get rid of the fat and we may just get somewhere. But we both know that’s not going to happen. The stats on this group are interesting to say the least.
Spoken like a true caregiver. Funny thing is, I thought I was talking to my brother all of this time and see I haven’t been.