Posted on 08/29/2009 8:55:28 AM PDT by SeekAndFind
Despite the fact that it’s misleading, a headline from the Associated Press article caught my eye last night…
The fear-mongering title? “Millions face shrinking Social Security payments.” The harsh reality? This is exactly the prescription that America needs right now to restore long-run government fiscal prudence.
Of course, “shrinking payments” isn’t really what the Associated Press meant…
The article goes on to explain, payments are only shrinking because the actuaries of the program estimate that there won’t be a cost of living adjustment (COLA) for the next two years.
Why? Deflation, of course!
If only the Associated Press had hired an economist – lord knows there should be plenty mulling about after the epic job losses in the financial services sector – they would know that deflation actually means an increase in purchasing power…
And since the Consumer Price Index – which is used to determine COLA – is down 2.1% year over year, Social Security recipients actually are enjoying a windfall gain: their checks can buy 2.1% more goods and services than they could last year, despite containing the same dollar amount.
Add in all the companies going out of business and offering products at record lows, and it’s a pretty good time to be on fixed income…for now. Only a central banker lacks the common sense and basic knowledge of economics necessary to understand that deflation isn’t some evil thing.
So payments aren’t really shrinking. In fact, they’re increasing, as they always have and always will.
Furthermore, Getting rid of COLA altogether would go a long way to ensuring the future solvency of Social Security.
In fact, since Social Security has been running at a deficit since March – ten years before the actuaries expected – it’s an idea that should be implemented immediately, and permanently.
Of course, that’s not the kind of position that’ll get a politician re-elected.
Nope, the policies of creating inflation, then adding in COLA to entitlement programs will continue, increasing the burden on Social Security — which already faces (with sister program Medicare) over $50 trillion in unfunded liabilities (promises made to retirees, particularly Baby Boomers, which it doesn’t yet have the money to pay out).
And since politicians keep those liabilities off the government’s books, it looks like we have a much more “responsible” Federal debt of only $11.7 trillion dollars.
Try doing some creative accounting like that at a company and see how long you can keep out of prison.
The last person to invest in a Ponzi scheme is the person that loses the most – 100% of their “investment” – and they lose it the fastest.
There’s no real solution to this destruction of your wealth – other than to provide for your own retirement and preserve as much of it as you can offshore. After all, as these programs face greater problems, there’s no telling when or how politicians may come back for more.
Soooooo, yes, by all means lets turn our health care industry over to the geniuses in the Gub’ment, since they are doing such a bang up job with this “entitlement program”...Health care may actually go to hell...But I hear they have some pretty good cheese.
So Social Security has been running a cash deficit since March? I haven’t seen this in the news. Which means nothing, since the press would hide any bad news that might embarrass TOTUS. Be that as it may, can anyone confirm if this is true?
Oh really?
After the 40% to 80% hit on whatever income the prudent enjoyed up until last year, in addition to Social security, most recipients have "enjoyed" a lowering of a notch or two in their economic status in society. 2.1% vs a 40% reduction? Let me think about that.increase
Should everyone share in the pain? absolutely. But it becomes a cruel joke when we realize that hundreds of white collar criminals waltzed away with trillions, and if any substantial number of them were hauled into jail for their crimes, I managed to miss the news.
And then there's the obvious cause of Social Security's demise: including benefits to millions of illegal and "normalized" aliens who never contributed a cent to the system, yet continue to drain it unabated.
Stopping that invisible huge drain in the form of the new welfare would certainly stop the drain of our remaining national wealth. Creating more illegals to the trough is certainly no great help.
Wow, these deadbeats on Social Security robbing us blind are complaining they are not getting a big enough take from the tax payers. the “Greedy Geezers” strike. These are the first ones to call others lazy, HUH?
Don’t be so hard on geezers after all they’ve been paying into the system for decades only to see the government spend all their money on frivolous waste, lobbyists, fraud, abuse and massive corrupt government.
Dolereed is on SS and medicare and jumped on cherry for saying he didnt want to work till 70 at:
http://www.freerepublic.com/focus/news/2326321/posts?page=25#25
But I do know a few republican geezers personally that expect some of the uninsured to pay for their medicare and social security, yet call them (the uninsured) losers. Problem is, the young and uninsured turn to those running for office, and want their handout too and it’s hard to argue with them with republicans for increasing SS and medicare. I talk to them too. The elected natural tendency is to spend.
Exactly! But this was the consequence of the 8 year massive immigration wave under Bush. Remember how we were told over and over we must feed the growing economy with workers? Remember how illegals were going to save SS? This is the result. Once you let them in, you own them!
Fortunately Obama may not get to amnesty the way health care is going.
Yes that was one of the big LIBERAL LIES right from the beginning, namely that having illegal alien workers would somehow save social security when in fact it exascerbated the problem and continues to do so to this day and beyond just like they did with Medicare and all the other taxpayer funded government subsidized entitlement programs.
Not only paying for all our working lives (51 years, here, so far), but many of us are still working and still paying either SS/MC taxes or self-employment taxes. The self-employment taxes continue even though margins have shrunk drastically and orders have decreased, as well.
And everyone forgets the increase in Medicare payments. Note that Medicare *recipients* pay $100/month for Part B and must carry prescription coverage on our supplemental (another $100/month) or Part D, which varies, depending on the coverage you select. Part D is mandatory coverage paid even if you have no prescription costs.
There is no free lunch and no senior is greedy for collecting SS/Medicare. We paid, we continue to pay and those who were prudent saw 40% or more of our retirement vanish, even in balanced investments, especially in fixed income if it contained corporate bonds. Our property taxes have increased,even though our home value has decreased, state income tax has increased, sales tax has increased and fees have increased on everything. Food has not deflated. Everything is 30%-50% more expensive. A can of Walmart house brand tomato sauce has jumped from .56 to .96 in just 3 months. Ditto canned chicken or beef broth. Ditto canned vegetables. Even plain white rice at Walmart has gone from .96-$1.00 a pound since Spring.
RE “Yes that was one of the big LIBERAL LIES right from the beginning, namely that having illegal alien workers would somehow save social security when in fact it exascerbated the problem and continues to do so to this day and beyond just like they did with Medicare and all the other taxpayer funded government subsidized entitlement programs”
Republican leadership, Bush McCain said it too.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.