Social Security’s Flat COLA

by Ryan on August 24, 2009

in Culture,Economy,Politics

It’s funny.  Some of the veteran teachers I work with indicated last November that the largest pay increases they ever received occurred during Reagan and Dubya’s time in office; that in fact when Dems are in the White House, raises were more like meager cost of living adjustments which ended up netting less than the rate of inflation.  Anecdote, I know, but interesting.  I digress.

Social Security hasn’t missed a COLA (cost of living adjustment) increase since 1975, but is slated to stay flat for the next two years (outside those whopping stimulus checks, of course!).  This amounts to a decrease given that inflation tends to creep, while their payments will stay the same until 2011 (BTW that’s when the Bush tax cuts expire too… hmm).  Social Security is sick and has been since the 1980s when this massive Ponzi scheme was blatantly identified as such.  However, we continue to whistle past and ignore the looming Entitlement Crisis, which is exemplified by Social Security’s systemic weaknesses.  So many people rely on it, but the money won’t be there forever.

On the bright side, I can think of no better way to pry old people’s support from Obamacare’s new potential entitlements when the one they’ve depended on for so long shows serious signs of stress and weakness.  The SS formula is simple:  tax increases or benefit cuts are the only ways to fix it.  The SS trustees opted for benefit cuts in this case.  Imagine if our health care is completely dependent on that paradigm too?  I’d also be on vacation this week if I were Barry.

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