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Margaret O'Brien Steinfels October 28, 2009 - 4:55pm
David Leonhardt, economics columnist, thinks giving social security recipients an extra $250. is money badly spent. "A Drop in the Wrong Bucket" http://www.nytimes.com/2009/10/28/business/economy/28leonhardt.htmlAnd in LA, over 65s are being asked to return for their H1N1 vaccine after priority persons have had their "shots" and after more vaccine becomes available: "Anxious Crowds Meet Ad Hoc Swine Flu Police" http://www.nytimes.com/2009/10/28/health/28flu.html?ref=usBoth seem like reasonable ideas. Let's hear it from the unreasonable!
What Mr. Leonhardt neglects - and I believe the President's plan does indeed recognize by implication - is that the repricing of money beginning in 2010 will have a disproportionatly negative impact on precisely this population.
I do think there has got to be a better way of handling vaccinations than having huge crowds show up, standing in line for hours and most getting turned away. Let people fill out a form on the web and those who qualify can be given a code or a ticket to print out if they are in the high-priority group. If there's any vaccine left over, dispense it by lottery. There must be a hundred different ways to avoid these kinds of situations. Remember when jury duty was two weeks of sitting around doing nothing? Now it's a few days, and some people never have to show up, just check in by phone.
To many ss beneficiaries $250.00 is something they look forward to. This is a smart political move to get that significant group on the side of the White House. Soften the impact of Fox News which is enjoying lambasting the administration on anything and everything.
I'm in the odd position of agreeing with Bill. Some need that money for their medication.
Based on reductions in energy costs and many consumer items the average ss beneficiary will has around $750-1000 more disposable income then last year. Bill gets it exactly - the $250 is a political payoff. So his party can saddle future generations with another 13 billion in debt to curry political favor with elders. It's shameful.
Now, now, Sean. I know you are more objective than most Republicans and disagreed with some of W's policies. But never did I see you call that shameful politico, shameful.
"Based on reductions in energy costs and many consumer items the average ss beneficiary will has around $750-1000 more disposable income then last year."The purchasing power of that money is going to disappear shortly though. While it is true the drop in American and global GDP growth has tempered demand for energy and we have seen concomitant reductions in energy prices, we are already seeing a pick-up in Chinese economic growth which will bring that demand back up again. Given the leadership in India, I am fairly certain they will be soon to follow. There are also certain policies which will likely be implemented domestically which will price energy costs up beyond their demand driven prices. And then the real killer for seniors - all of us really, but seniors disproportionately - will be the cost of money. We already see on the institutional side double-digit increases in the cost of money today and that will be seen in the cost of money to consumers in 2010 and in the producer prices and consumer prices we see next year. I can't speak to motives but seniors are in for some serious pain for the forceable future if you ask me. There are certainly better ways of helping them than borrowing money from China to directly transfer to them, but while you are correct that people on fixed incomes benefit from the slight deflation we saw over the last twelve months driven by the drop in energy prices, those same people are going to see their incomes and savings ravaged by the coming pick-up in energy prices as China and India get their economies going again and the painful raters of increase in the cost of money we will be enduring for years to come.
MATI agree with you that inflation is probably "going to" eat away at the value of the dollar in a big way at some point, but there are two points to make.First, the system is not based on what we think might happen, but what we know. And right now we know there has been deflation. Inflation will happen once the economy heats up, but who knows when that will happen.Second, the people who are proposing this are the ones saying their proflagate spending won't result in inflation, so their motive clearly can't be avoiding the pain of inflation. This is classic Chicago style politics - spread a little walking around money to make people beholden to you. Unfortunately, to do it they are doing more of the same that you say will cause the inflation in the first place.
Sean --The system is based on what we know??? Aw, c'mon. Economics decisions are made on the basis of projections into the future all the time. These can of course be wrong. But the projections include non-facts.Is a conservative someone who thinks it is always best to preserve the status quo rather that act on perceived probabilities? What you said seems to imply that. It's a theologically unsound position, I think. Christians must always preserve some optimism about the future, even the future of this miserable world. But this implies that we must be willing to be agents of change, to take a reasoned chance.
This is classic Chicago style politics spread a little walking around money to make people beholden to you. And how would you characterize the Medicare Prescription Drug Benefit? Texas-style politics?
And of course tax cuts for the wealthy don't make anybody beholden to you.
MAT, aren't social security payments tied to inflation? I thought the purpose of this $250 payout was because ss payments would not increase this year because of negative inflation.
AnnThe system is based on laws that Congress passed, which raises or does not raise the amount based on the previous year's CPI. And if anything, the scenarion MAT outlines is pesimistic and my take is the optimistic one.David,I won't defend the drug benefit since it isn't defensible. Although I will point out that even though Bush signed it, the only opposition he faced was from conservatives - and if the Dems had their way it would have been even worse.And you have revealed the classic progressive mindset - when the state lets people keep their own money it's a payoff. Given that the wealthy - until this recession - paid a larger portion of the tax burden after the cuts than before, I don't think of this as a payoff - it's just good economic sense.
And you have revealed the classic progressive mindset when the state lets people keep their own money its a payoff. Sean,No, I disagree. When the state gives unjust tax breaks to some, that is a payoff. The classic conservative mindset is that it is always a sign of good government to lower taxes. All taxes are bad. People shouldn't have to pay taxes. And it is just plain old American to believe government should provide services and not expect to collect enough in tax revenue to pay for them. We need excellent schools and low property taxes. And so on.And in any case, giving tax cuts is just as political as sending out checks. It is not "Chicago politics" to try to make the people feel they got something from you. It's just politics.
DavidFirst, tax cuts are not the same things as giving out checks unless you are the one who paid the money in the first place. Given that ss already rel;ies on inputs from current contributers to meet its obligations to people who no longer pay into the system (Bernie Madoff would be proud) . . . . well.Second, most conservatives are not "against taxes" they are against excessive taxes. More importantly, they don't view taxing as a means to "justice." It's for raising revenue, pure and simple. Your discussion of schools is a great example. The US spends more per student than almost every country on the planet and we spend more than twice as much as we did thirty years ago in real - inflation adjusted - terms. Are the schools twice as good? I'd be very happy to spend as much as is reasonable for a good system, but shouldn't we do something about the system before we turn to higher taxes as a fix given they haven't been the fix before?Finally, and I ask this in all sincerity - What is an "unjust" tax cut? What is a "just" tax level? A tax that maximizes revenue - something good for everyone - and does the least harm to the productive economy - also something good for everyone - to effectively meet the bona fide needs of society in general - wow, a trifecta of common good - that I get as a goal. But justice? Why should the fact that Warren Buffet pays a top rate of 37 instead of 39 concern me one whit unless it is necessary to acheive those three goals?
Margaret O'Brien Steinfels, a former editor of Commonweal, writes frequently in these pages and blogs at dotCommonweal.
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