November 2, 2009 - By True Patriot and
Congressman
Ron
Paul
There has been a lot of talk in Washington recently about senior
citizens, mostly about how various healthcare reform models
would help or hurt them. But there is another critical issue
that has quietly devastated seniors financially over the
last few decades. It concerns how the cost of living is calculated.
How does the administration justify not giving a cost of
living increase to Social Security recipients this year?
According to the official Consumer Price Index calculation,
life has gotten cheaper for the first time in decades. If the
government can show statistically that the cost of living has
gone down, not up, then they can make the case for not giving
a cost of living increase to social security recipients. But
does this match reality? Using older calculations of CPI, the
cost of living has actually increased – by roughly 5
percent!
The CPI (Consumer Price Index) is a calculation based on the
average price of a fixed basket of goods that was initially
designed to help businesses adjust for inflation. The government
eventually started using it to determine cost of living adjustments
for entitlement programs. Couple that with politicians’ discovery
that they could raid the social security trust fund to pay
for new spending programs, and you have a perfect storm to
deny seniors what they were promised, while hiding the true
size of the deficit. For politicians, it is a win-win.
For seniors, it is a different story. Economist John Williams
of Shadow Government Statistics has estimated that if the original
methodology of CPI had not changed, Social Security checks
would be nearly double what they are today. This represents
a lot of money that politicians have been able to literally
steal from seniors, to spend on their own wasteful programs.
One example of how they do this is to substitute hamburger
for steak, which lowers the average price of that basket of
goods. But living on hamburger, or maybe dog food, instead
of steak does not represent a constant standard of living.
This renders the measurement virtually meaningless, even though
politically it comes in very handy.
I have introduced legislation to keep politicians in Washington
from ever raiding the Social Security trust fund again. HR
219 The Social Security Preservation Act would assure that
all monies collected by the Social Security Trust Fund would
only be used in payments to beneficiaries, or be placed in
interest bearing certificates of deposit. This would at least
stop the bleeding of the fund, and take away some incentive
to tease and torture the numbers in order to give seniors the
minimal amount. This would also cut off a source of funding
for government growth, so it is not likely to get easy support
from many politicians.
It is bad enough that Washington imposes high payroll taxes
on American workers. The least Congress could do is use the
tax dollars for their stated purpose. Instead, seniors will
have a harder and harder time trying to survive on a fixed
income in an economy based on variables and deception. For
them, it is too late to start over. Today’s young people
will be forced to pay into the system for years to come. The
first step towards solving the impending crisis facing Social
Security is to stop politicians from raiding the trust fund
and to significantly cut federal government spending.
Read more Articles by Ron Paul at http://www.house.gov/paul/legis.shtml
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