The Banks Got Bailed Out - Seniors Got Sold Out

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The Banks Got Bailed Out
Seniors Got Sold Out

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First Congress Stole The Social Security Surplus
NOW THEY WANT TO ROB SENIORS THROUGH INFLATION


Super Committee wants to change the way inflation is calculated by adopting the so-called “Chained CPI” to reduce Cost of Living Allowances (COLAs).

For months we at SSI have warned that the congressional “Super Committee” is hiding in the weeds, waiting to cut Social Security benefits for current retirees—not in ten years, not in five years, not in two years—RIGHT NOW! 

According to sources on Capitol Hill with whom we speak regularly, members of the Super Committee are seriously considering jiggering the way inflation is measured to understate inflation even more than it already is so they can cut Social Security benefits for current recipients and blame it on “technical adjustments.”  Congress has “technically adjusted” Social Security benefits in half since they learned to play this despicable game back in the 1970s.  Now they are at it again.

They intend to do it again by changing the way inflation is calculated so they can cut COLAs now.  It’s called the Chained Consumer Price Index (Chained-CPI), and the politicians and bureaucrats are trying to slip it by the American people through the Super Committee backdoor, calling it merely a “technical refinement” of the index used to calculate inflation. 

While the politicians and bureaucrats falsely describe adoption of the Chained CPI as nothing more than a “technical adjustment,” it would result in big lifetime losses in benefits for the average Social Security beneficiary.  An average earner retiring in 2011 at age 65 would lose more than $6,000 over 15 years if the chained CPI were adopted today, assuming inflation remains mild—which few economists believe will happen.  And, cutting benefits isn’t all the Chained CPI would do.  Many seniors would end up paying thousands of dollars more in higher income taxes because moving to the Chained CPI also would reduce inflation indexing of the tax brackets. 

Lower benefits, higher taxes.  It’s the same old, same old attack on old people by the same old politicians and bureaucrats with outrageously large salaries, Cadillac healthcare coverage and cushy retirement plans.

Don’t let Congress put seniors in CPI chains.
Fax Members of Congress and tell them NO CHAINED CPI!

The debt deal President Obama signed into law earlier this year was a convoluted and deceptive scheme meant to trick the public into allowing the government to raise the debt limit again.  In this legislation, Congress created a new powerful Super Committee to circumvent the regular legislative process so it can cut deals and protect their friends in secret behind closed doors.  The Super Committee must come up $1.2 trillion in deficit-reduction proposals by November 23 or automatic, across-the-board “sequester” cuts will kick in.  Those sequester spending reductions would EXCLUDE Social Security.

Tell Congress to take back the legislative process from the Super Committee.  Let the automatic, across-the-board sequester kick in, which protects Social Security benefits from cuts.

Congress and President Obama are desperate to prevent the automatic sequester cuts from slicing federal spending other than Social Security across the board.  Why is that?  Because such reductions, which would protect seniors’ Social Security benefits, would cut deeply into Washington’s sacred cows cherished by the special interests that bankroll the election campaigns of Members of Congress and the president.  That is why the Super Committee is conniving to cut Social Security benefits in an underhand fashion through a “technical” change in the CPI Index.

It wasn’t enough that Congress robbed the Social Security Trust Fund for 25 years to pay for everything except Social Security. It wasn’t enough that they didn’t invest the money but instead spent it on everything from paper clips to battleships.

It wasn’t enough when the federal government and Wall Street conspired to turn our financial markets into a giant casino. It wasn’t enough that when the casino went bust the banks got bailed out.  It wasn’t enough when the Fed printed trillions of dollars of new money out of thin air to “purchase” the banks’ bad assets in the name of “financial stability.”  It wasn’t enough that this flood of new money eventually will result in much higher inflation.  No, that wasn’t enough for the Washington-Wall-Street Axis of Avarice.  Now they intend to sell out seniors by using the very inflation they created to feather their own nests and bail out their cronies to cut Social Security benefits under the smoke screen of “technical adjustments.”

They want to cut Social Security benefits through inflation so they can keep up their spendaholic ways.

Don’t let Congress put seniors in CPI chains.
Fax Members of Congress and tell them NO CHAINED CPI!

How exactly does the Chained CPI scam work? 

Like this: The Chained CPI assumes that a smaller COLA or no COLA whatsoever is justified because consumers can substitute cheaper products when prices go up.

I call it Spam Logic: If old people substituted Spam for hamburger, it wouldn't cost them anymore to eat today than it did a few years ago.  Therefore, we are going to change the way we measure inflation to assume people make these kinds of substitutions to avoid paying higher prices for food. Ergo they won't be needing a Cost Of Living Adjustment (COLA) to their Social Security benefits because they won't be paying more for food.

Not only does this logic violate the very basis of the COLA—Congress enacted it to prevent inflation from forcing seniors to lower their standard of living to live within an inflation-eroded fixed-income budget—it ignores another very important reality.

Healthcare costs, which consume a large amount of seniors’ income, cannot simply be substituted with a cheaper version. A senior cannot, for example, just substitute triple bypass surgery with a double because it’s cheaper. Nor can knee surgery be substituted with crutches.  The cost of Medicare Supplemental Insurance doesn’t stop going up just because the government chisels COLAs with “technical adjustments.”

Don’t let all the technical jargon fool you.  The so-called “hedonic and quality adjustments” made under the Chained CPI are smoke screens to cut Social Security benefits by chiseling inflation adjustments to benefits. In plain English, this so-called “refinement” to the inflation measure means finagling the numbers to understate inflation even more than the CPI already does.

Don’t let Congress put seniors in CPI chains.
Fax Members of Congress and tell them NO CHAINED CPI!

The Chained Consumer Price Index (CPI) is one more in a long line of government statistical scams.  It used to be called assuming away the problem.  This underhanded means of cutting Social Security benefits isn’t new.  It has been going on since President Carter was in Office.  According to Walter J. “John” Williams, one of the foremost expert on how the federal government lies with statistics:

In particular, changes made in CPI methodology during the Clinton Administration understated inflation significantly, and, through a cumulative effect with earlier changes that began in the late-Carter and early Reagan Administrations have reduced current social security payments by roughly half from where they would have been otherwise. That means Social Security checks today would be about double had the various changes not been made.   (http://www.shadowstats.com/article/consumer_price_index)

This chart shows how much Social Security benefits were cut by chiseling COLAs between 1993 and 2008, the year before the government stopped giving seniors COLAs altogether.

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Seniors want to trust their government.  I can’t tell you how many of them come up to me in senior centers and other places I speak in utter disbelief when I tell them the plot underway in Congress.  I tell them, don’t take my word for it; use your own eyes.  Do you believe prices have been rising the past two years?  Has the price of gasoline increased since 2009? You better believe it has. 

The week President Obama was inaugurated, the average price of gasoline was $1.81 a gallon.  Today, the average price is $3.53 a gallon.  That’s a 95 percent increase in the price of gasoline in three years.  How much have Social Security benefits gone up since President Obama took office?  5.8 %. 

No inflation?  Right! What are you going to believe, your own two eyes or the lying politicians and bureaucrats who bail out their friends on Wall Street and pad the balance sheets of huge corporations that have become an arm of the government. 

They feather their own nests and bail out their friends while they sell out seniors.

Don’t let Congress put seniors in CPI chains.
Fax Members of Congress and tell them NO CHAINED CPI!

Does it cost more to heat your home in the winter than it did two years ago? Have you gone to the grocery store lately and discovered the price may be the same but the size of the product is smaller?  To a person, seniors I talk to say they, yes, yes, yes.  Prices have steadily risen and the size of products continues to shrink.

Then I ask them, “Why haven’t you received a Social Security COLA since 2009?  I’ll tell you why:  The government claims there is no inflation—you don’t deserve an inflation adjustment because prices aren’t rising.  Now they want to tell you there is even less inflation.

Of course prices have been rising.  What are you going to believe your own two eyes or your lying government? 

It gets worse, and it’s going to get worse yet.  Everyone in Washington knows the Federal Reserve Board has artificially held interest rates close to zero for almost a decade, and it has been printing trillions of dollars of new money out of thin air since 2008 to bail out big banks and big corporations.  It takes a while for all that new money to work its way through the economy and result in higher prices but it is finally beginning to show up as higher inflation. 

In September, wholesale prices rose at 10-percent annual rate.  Even the current rigged-up CPI Index picks up that rate of inflation.  Hence, the government announced last week that inflation rose so much last year that finally they are being forced to give seniors a 3.6% inflation adjustment to Social Security benefits in 2012.  No wonder they want to “refine” the CPI to hide inflation even more.

Washington has already run the printing press enough to raise the consumer price index for all urban consumers (CPI-U) to 3.9% for the year (as of the end of September), the consumer price index for urban wage earners and clerical workers (CPI-W) to 4.4% for the year, and the producer price index (PPI) to 6.9% for the year.  When measured correctly, the current rate of inflation in the US is 11.5%.

Politicians are close to panicking.  A 3.6% COLA will cost more than $20 billion—$20 billon in pork Congress won’t be able to lard on their special friends.

 

Defend America,

Lawrence A. Hunter, Ph.D.
Social Security Institute
15 Culpeper St.
Warrenton VA, 20187


Don’t let Congress put seniors in CPI chains.
Fax Members of Congress and tell them NO CHAINED CPI!

 

 

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