by Ron Paul: Be
Prepared for the Worst
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?
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
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.
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.
Paul is a Republican member of Congress from Texas.