COLAs--Bandaging a Cold

Nobody likes Big Government...that is, until they receive a government handout.


Although Washington is not giving a COLA to seniors, Obama's recent move to appease the senior community by giving $250 in Social Security benefits to each senior citizen is just another example of how he wants Americans to suck from the teat of the Nanny State.


As the aforementioned article states, however, Obama is having a heck of a time figuring out how to pay for it.   Two problems here with Obamanomics, which is really just a euphemism for modern-day Keynsian economics gone ary:



1) You can only spend so much of other people's money before it's gone.
2) Money does not grow on trees, and you cannot print money en masse without substantially depreciating the dollar. 


On the short term, I wonder how the Obama administration is going to pay for it.  He has already racked up an unprecedented amount of debt.  On the long term, I wonder how the American people are going to pay for this entitlement spending.  Baby boomers are going to retire soon, and as such, Social Security spending will skyrocket.


This issue has always been of particular intrigue to me because we're aware of the issue, we have implementable solutions, and yet we're waiting for catastrophe to strike because "oh, we don't have to worry about that for a while." It's like having a little hole in the kitchen ceiling, and rather than going to the hardware store, spend $10 for the supplies to patch it up, we'd rather just wait for the whole kitchen to flood. 

There are options to deal with the problem.  The first is to do nothing--bad idea!  The second is to raise taxes, something which will be symptomatic of the Obama administration.  The third is to reduce benefits, something that is inevitably going to occur with Medicare.


As a libertarian, it should go without saying that I believe in more privitization of the service, like just about anything else. This has nothing to do with not having sympathy with the elderly.  It's more like "I want to bring down an ineffective system while simultaneously assuring that elderly people in generations to come have solid, secure retirement funds." COLAs don't solve the problem--they perpetuate, and not only do they perpetuate it, they actually cause harm to near retirees.  None of the aforementioned "solutions" deal with diminishing returns or the inevitability that the government won't be able to deliver without causing massive debt to American taxpayers.  A more gradual approach of partial privitization of retirement money, much like the PRA's Bush proposed in 2005, would at least be a step in the right direction to empower people with their own financial decisions. I could go into detail about specifically what we can implement, but I'll save that blog entry for another day.

"Government is not the solution; it's the problem." -Ronald Reagan