The check is in the mail

There’s a recession on. Energy prices are down, and the official cost of living with them. Therefore, you might expect government payments that carry “cost-of-living adjustments” to be dropping, helping to ease the deficit.

Not so. When the cost of living goes up, payments to Social Security recipients — among others — also go up. This year they increased by 5.8 percent, the biggest rise since 1982, largely because of a spike in energy prices in 2008.

But when the cost of living drops, Congress in its wisdom (foreseeing the squawks that might otherwise arise, presumably) has decreed that pay-outs will not drop; they will merely remain the same.

Guess what? Recipients of the popular Social Security welfare payments (the courts have repeatedly ruled there is no “trust fund” nor “entitlement,” that Social Securtity “premiums” go into the general fund and Congress can reduce pay-outs any time it pleases, regardless of what beneficiaries once “paid in”) started squawking anyway, as soon as they heard that next year — for the first time since the automatic adjustments were adopted in 1975 — there’d be no benefit hike.

Enter President Obama, who has called for Congress to send every senior citizen an extra $250 handout before the next congressional elections.

Democratic leaders in Congress — including Senate Majority Leader Harry Reid, D-Nev. — have signed onto the plan. Republican leaders said they, too, favor the payments, but don’t want to increase the deficit to pay for them. Instead, they want to paper-shuffle “funding” from moneys not yet used up out of last winter’s “stimulus” check-kiting scheme.

The White House said the stimulus payments would cost $13 billion. A congressional estimate put the cost at $14 billion. Mr. Obama didn’t say how the payments should be financed. But the president is open to borrowing the money, increasing the federal deficit, just as Congress did with the first round of “stimulus” payments, authorized last winter.

Many seniors groups applauded Mr. Obama’s plan to send the checks to about 57 million senior citizens, veterans, retired railroad workers and people with disabilities.

“Without relief, millions of older Americans will be unable to afford skyrocketing health care and prescription drug costs, as well as other basic necessities,” said Tom Nelson, chief operating officer for AARP.

This despite the fact that “The real purchasing power of their benefits is actually higher today than it was last year,” according to Andrew Biggs, a former deputy commissioner at the Social Security Administration and now a resident scholar at the American Enterprise Institute.

But why stop there? If the government can make voters happy by simply mailing out checks whenever it pleases, without devaluing the dollar and thus eroding the value of the stocks or bank accounts of anyone foolish enough to have “saved money” — if Congress can just send us all checks with vague assurances that we can always borrow the money from the Arabs or the Chinese, or “tax the rich” to cover all this check-kiting — why a measly $250 to no one but the retireees and the disabled (who these days include a lot of apparently able-bodied people no longer required to go look for work because they’re supposedly “psychiatrically disabled”)?

Why not REALLY end the recession by sending $25,000 to everyone with a driver’s license?

Thirteen billion, thirteen trillion. What’s the difference?

College freshmen are often given credit cards “for emergencies” when they head off to school. A few months later, a grown-up often has to lower the boom on a youth who thought his desire for a new stereo or motorcycle constituted an “emergency.”

Who are the “grown-ups” who will impose some discipline on these overgrown brats in Washington? When the dollar lies in tatters — along with our standard of living — will it be they, with their gold-gilt pensions, who suffer the consequences?

Or will it be us?

2 Comments to “The check is in the mail”

  1. John Brook Says:

    In 1961, when I first entered the work force, I was stunned to learn that the government was taking two taxes from my pay – the first, income tax, and the second, well, an income tax of sorts, as it was a tax based on income. I didn’t want to participate in social security, but I had no choice. Work and pay the social security tax, or move to another country, which probably had more onerous taxes. There was zero possibility of opting out. And now I should feel guilty about getting that money back with interest. Oy vey.

    I believe it was in the Johnson era when the current 15.7% rate was established. Imagine how much money over the years was taken from me, money I couldn’t invest in my retirement. Oh, for the past 25 years, I’ve been self-employed, so that rate dropped to 15%. Whoopie.

    As a 60s something drawing social security, I’ve learned that my expenses are not the expenses of my children, nor of their children. The government lumps them all together and declares we’ve had no inflation. I beg to differ. The cost of my wife’s and my expenses have soared this past year. Let’s see, the food bill has escalated. Why, I don’t know, but I do the family shopping, and it has, in fact, increased. Our property taxes increased. Our sales tax increased. Our medical expenses, both quantitative and cost per service have increased. I could go on, but you get the point.

    The government lumps everything together and doesn’t look at decadal data, or if they do, they ignore it.

    Actually, the government distorts the inflationary effects in the economy completely. A good web site to track this is: shadowstats.com.

    So what’s a good conservative to do? Starve for his principles? How do we dismantle these onerous programs, without penalizing the very people who objected to them in the first place?

  2. Tom Says:

    Vin, Could you please provide the relevant citations to the quoted decisions?
    When I entered the work force in the ’60s the FICA Tax (Soc Sec & ultimately SSDI) was explained by Gov’t forms as a ‘hedge’ against poverty in old age, or a ‘back up’ if catastrophically injured at work, or unable to work due to injuries sustained from work accidents. In the ’80s the Soc. Security Admin ran the infamous “Hey kids, need money for college? Have you or your folks paid into Soc Security? If so, then contact us, [i]we can help[/i]! And they did! They ran a large cash reserve down severely. Well, its 2009, I’m on SSDI, and our fearless leader says there’s NO inflation- in [i]what world[/i]? My grocery prices are climbing, along with utilities, and gasoline. Obama wants to give folks on Soc Sec & SSDI a $250 check since there is no COLA to offset living cost increases(isn’t that a definition of inflation?)- will it be taxable like my SSDI (yeah SSDI is taxed! Talk about double taxation!!), will that amount if used by those that need it, cut them off from programs that help them survive? Remember the debates and questions about what would happen when folks cashed their ‘Stimulus Checks’? Social Security & SSDI is not welfare! I, and millions others were forced to pay into a system that was to act as a safety net- IT IS NOT WELFARE!

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