Attacking Senior’s COLA Increase to Solve the Social Security Problem—REALLY!

The Role of Government: 

Create a Crisis, then Rush in to Fix it: 

Corollary, Create a Group to Point to as the Problem and Attack them as the Fair Solution.

First, Attack the “Rich”

Next:  Attack Social Security Recipients

Next:  YOU, assuming you are working!

Social Security:  The Government has politicized the Social Security system that was created to help people during their retirement years and also those who may be disabled and not capable of working to support themselves.  They have used it to hide their own budget ineptitude and to fund their spending follies.  Now that their little slush fund is getting in trouble, they are talking about fixed their Trillions in Debt by taking and $2.50 from your GRANDPARENTS!  Wow, what a brave solution!

     The HERITAGE FOUNDATION, who at one time supported national healthcare, ala the single payer version,  joined in with the Left’s IDIOTIC proposal to “tweak” the Social Security COLA in order to help make Social Security Solvent and take care of a Trillions if dollars in Unfunded Liabilities.  The article was part of their Morning Bell and it was entitled “Morning Bell: 3 Simple Solutions for Fixing Social Security” and the link to the article is (  The problem with simple solutions is that they usually don’t work but give the inept crowd in our government, a lot of sound bites.

     The author, Rob Bluey, basically says that the government should focus on Medicare and Social Security rather than tax increases.  Bluey makes the point that in the next 75 YEARS, Social Security will owe $11.3 Trillion more than it takes in.  WHAT HE NEGLECTS TO SAY IS THAT TODAY THE SOCIAL SECURITY SYSTEM IS AND WILL GENERATE POSITIVE CASH FLOW THROUGH 2021, DUE IN PART TO CONTRIBUTIONS AND INTEREST EARNED BY LOANING THE SOCIAL SECURITY FUNDS TO OUR GOVERNMENT TO FUND THEIR OVER SPENDING GLUT!  What he does not say is that this government’s 2% reduction in Payroll Taxes robbed $103 Billion in 2011 and $111 Billion in 2012 from the Social Security Fund, now he is worried about seniors getting a 1.7% COLA in 2013 rather than the 1.5% the seniors would get with his proposed CHAIN COLA plan!  His COLA adjustment could not make up for the lost funding caused by the 2% payroll tax boondoggle in 20 years!  It was this siphoning off of Social Security Funds that caused the SS system to have a shortfall in 2011.  But the reduction he advocates is a 12% reduction in the COLA, which is not much to Mr. Bluey, but for the average Social Security recipient who gets $1,236 per year a few bucks could make a little difference especially since this same Senior’s Medicare share is also going up! 

     Let’s talk COLAs for a second.  The average Social Security recipient spends the lion’s share of their available cash on groceries, gas/electricity, housing and medical care.  Their COLA should be based on these 4 items and NOT ADJUSTED because gas prices were seasonally too high, or some specific food prices spiked for a while or whatever reason the government comes up with.   The new “CHAIN COLA” the government is trying to stick on Seniors assumes a substitution capability on behalf of Seniors as consumers.  For example, if the price of a filet mignon goes up to $12.00/lb from $8.00/ lb (50% increase), but chicken only goes up to $.95/lb from $.86/lb (10%), the Senior would substitute chicken for filet mignon!  New flash, Seniors aren’t eating a whole lot of filet mignon on $1,236/month but the percent means more to them than let say, Warren Buffett!  So, for food costs, the government would take the filet increase out of the total CPI calculation and reduce the Senior COLA based on a lower index!  How about indexing who is buying filet versus chicken?  If you are poor, you don’t indulge on filet mignon, you are buying the lowest cost protein you can get, including pet food.    

Raising Social Security Age and Means Testing: Bluey also joined in with the leftist to raise the retirement age as well as join the PROGRESSIVES in reducing social security benefits if you made a certain income, also known as means testing!  Means testing is another way of saying you can pay in but you can’t have anything back because you were too successful!  There are so many other systemic, real solutions that are available to make Social Security solvent and these two are just asinine on the surface.  At some point we will need choice of the types of investments one chooses with a certain level of a safety net.  This is not privatizing social security, it is taking some of the decisions out of the hands of this government and politicians who could not manage even the simple task of delivering a letter.  Some solutions will be addressed in a subsequent article.

The Social Security System has been corrupted for its political cronies and insiders since its inception.  Do you know:

  1. Public Employees are Exempt from FICA:  Most public employees are not in or have to pay Social Security taxes?  So, while we have a system that is supposed to tax everyone, those privileged in government can opt out to a more lucrative alternative.  They have their own systems!  Who can blame them.  This week a California Highway Patrolman took over $500,000 in cash for back vacation, sick leave, overtime, etc. and then retired on $178,000 per year!  That is $14,800/month, while Seniors average $1,236/month.
  2. Social Security Investments and ROI:  It is illegal for the trustees of the Social Security Funds to invest the funds in anything but government securities.  But, the Federal Reserve can invest any amount it wants into any investment is accountable to no one.  The rate of return to a Social Security recipient is well below market earnings.  If someone who just retired and made close to the top of the social security wage cut off for a large portion of their life, they would be receiving over $10,000 per month, not $1,236, based on Standard and Poor fund index appreciation over 40 years.   So, the FED (our government) can prop up banks and stocks buy pumping non-existent money into these markets, but the Social Security recipient can’t expect a decent ROI based on these same market’s growth?  You don’t mind playing Russian Roulette with our Fed dollars but squeeze old people for theirs that they earned and contributed.
  3. Social Security Benefits are Taxable:  You pay FICA on your gross income but still have to pay taxes on your benefits, most of which you paid for!  Once again, stick our Seniors with a system no one else have to live by! 
  4. Social Security Funds have hidden the True Public Debt of the US:  the total US debt is over $16.3 trillion dollars but you will oftentimes here that the total PUBLIC DEBT of the US is about $11 Trillion and some change.  The other is Government debt, debt owned by the Social Security Fund and other government funds which is a little over $5 Trillion.  So, this government forces Social Security to live with lower than market returns while it borrows and uses its cash to fund their criminal levels of spending.  Even the Public Debt is a lie.  A large portion of the Public Debt is owned by our very own Federal Reserve!  So, we let the Federal Reserve print money to buy our debt.  Only the criminals in government could come up with this scheme and not be in jail, this includes DEMOCRATS AND REPUBLICANS AND WHATEVER LABEL THIS BUNCH ATTACHES TO THEMSELVES.

     This COLA discussion is just another way for this government to lull you into another of their head fakes!  LOOK, we can cut the COLAs!  All the while their foot is on the throttle to make sure as many of the Bush Tax Cuts expire as possible; that you don’t focus on the Billions in Obamacare related taxes that will kick in 2013; that they continue to spend the trillion dollars a year of stimulus that continues every year that there is not a new budget; that they even add billions in new spending to “stimulate” the economy which is the farthest thing from the top of their lists; and to force us to accept a $20-$25 Trillion Debt Ceiling which is a real contradiction in terms.  Just like an Intelligent Congressman or Senator or President. 

     We are trapped in some sort of alternative universe at this point where up is down and down is up.  Where spending is investment and debt is our insurance for the future.  Republicans are no better than Democrats and all are complicit for this massive cultural, fiscal, and moral cliff we are going over.  All I can compare this to is the 1930’s when Hitler wooed the Germans into believing that their enslavement was in their best interest.  He did this by blaming Jews and others for the plight of his citizens and the citizens bought it.  The only way a conservative in office today could redeem themselves would be to stand up and help to create a new party.  We are going over the waterfall and the democrats and republicans are both manning the oars and paddling as fast as they can towards the precipice.  They created this cliff and now are shoving you over it…

RD Pierini


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