Welcome to my blog where I discuss money, investing, politics, and anything else import in the world. I find it surprising that most people in their 30s have very little knowledge or interest in these areas. Of course everyone is interested in money, but very few take the time or have the discipline to properly save and invest it for the future or short term. For those who at least have the interest, I'll write about my experiences and methods of investing, and hopefully give you a head start in investing.

Saturday, October 16, 2010

Social Security Recipient Angry, Politician Pandering = Bonus for Seniors

What could be worse for incumbents in the House of Representative, who are trying to save their jobs, than the high unemployment numbers? How about angry seniors?

The large and powerful voting block of retired citizens are now feeling some pain. Maybe the unemployment and jobs market didn't bother them too much, since they are retired, but now that their two staples of retirement - their piggy bank of a house, and monthly Government stipend from the Social Security Administration - are under attack they will be looking for vengeance.

First the facts. For the second year in a row, there was no cost of living adjustment (COLA) in Social Security payments, for the simple reason that there has been no inflation since their last increase in 2009. They received a huge 5.8% increase in 2009, due largely to the soaring gas prices at the time. Those increases in prices were temporary, however the raise to Social Security recipients was permanent. When prices dropped (measure by Consumer Price Index (CPI)), such as energy and housing, they still kept their raise in 2010. In reality they should have seen a decrease in 2010 and then would have gotten another increase in 2011. However, the COLA formula does not allow for decreasing the payment so it stayed steady.

Cue in the all the local newscasts interviewing the elderly who are angry, sympathetic, and claim they could really use the extra money.

Cue in the politicians who don't want to lose votes. Immediately there was talk from Nancy Pelosi and others who want legislation to give seniors a one time bonus of $250 to make up for no raise. Does this sound like buying votes to anyone? This would, on average, amount to a 2% raise for Seniors.

What about the unemployed with 2 kids, shouldn't they get a raise? Surely they deserve it too? Where does it stop? We all wish there was more money to go around, but when times are tough, you can't have the Government spending our money to help out their favorite voters. There is legislation as to how and when there is a COLA, lets follow that. When the local, State, and Federal Governments are cutting jobs to save money, workers are laid off to pay for pensions of retired employees, and there is a gaping Federal budget deficit ($1.3 trillion in 2010 alone) there needs to be constraint.

The Government needs to get leaner until it can live within the tax revenues being generated, not finding new ways to spend money.

1 comment:

Robert Wasilewski said...

Hey ...everybody's being helped. What everybody doesn't see is it is sinking the ship. The 2% reduction in payroll tax will get a lot of votes and workers love it. The problem is we've gone from a situation where we weren't fixing the Social Security problem to making it worse.