For the first time in almost 35 years, there will be no cost of living increase in Social Security payments. In the predictable “something must be done about this [so called] problem” mentality of this administration, President Obama has proposed sending $250 checks to over 50 million seniors to help them cope with their financial woes.
The problem here is that there is a very good and simple reason why there is not going to be an increase in Social Security payments: prices have dropped by 2.1% since the fall of 2008, meaning that the money that seniors already get from Social Security actually buys more goods and services than it did last year. On top of this, the Social Security Administration has already given seniors a large increase in their payments this year: in January, seniors received a 5.8% boost in their payments, the largest increase since 1982.
Once again, President Obama is using misguided “logic” to support his own political goals. Social Security payments are indexed to price inflation, however, they are not allowed to be decreased, meaning that a decrease in prices actually makes seniors much better off.
I understand that many seniors are suffering in this recession. Many have lost a great deal of their savings due to the collapse in stock prices. However, Congress decided over three decades ago that Social Security payments would be linked to the cost of living. Besides the obvious reason of guaranteeing seniors a livable income, Congress likely had another reason for guaranteeing the benefits: they wanted to take the decision out of the hands of the political process. Right or wrong, it will be very difficult for members of Congress to vote against the $250 payment for seniors. For one, seniors are a vulnerable group, many of whom are living only on their fixed Social Security payments. Seniors also vote–a lot. As a group, they historically have the highest rates of voter turnout.
I firmly believe that this bill should be voted down. For one, President Obama’s proposal to send checks to seniors is addressing a problem that doesnt actually exist: seniors can buy more for their money than they could a year ago. Additionally, these payments will cost roughly $13,000,000,000 [$13 billion] in money that the government does not have. The money being spent on this non-existent problem will have to be expropriated from hard working citizens or printed out of thin air (devaluing the savings and earnings of anyone who does not receive a payment).
This “something must be done” mentality is flat out wrong. Many supporters of the bailouts, stimulus, and other interventionist policies defend them not on moral or economic grounds, but rather defend them by saying that “at least they are trying something.” This mentality has brought this once great Nation to the brink of bankruptcy and has brought government regulation into nearly every single aspect of daily life. We can only hope that enough members of Congress will do the right thing and oppose these payments.
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