The $250 “stimulus” payment to the nation’s 57 million Social Security recipients is a terrible idea.
President Barack Obama and his Republican predecessor did the right thing when they adopted stimulus packages to prevent a serious recession from turning into something worse. Ultimately the free market would have corrected itself without government intervention, but the lesson of the Great Depression was that the purity of laissez faire economics is not always worth the human cost.
The stimulus packages worked. Lots of people are out of jobs, it is true, but the gross national product is now beginning a slow upswing. The stock market is showing signs of life. Commercial and consumer credit, frozen in late 2007 and 2008, are thawing. In terms of federal debt, the cost of averting economic catastrophe was high, but worth it.
Until now, Obama has been principled in his approach to economic stimulus. The goal was to avoid a depression; the subsidiary and usually consistent goal was to help those who most needed it.
Issuing $250 checks to seniors accomplishes neither goal. It is, rather, a vote-buying scheme that will force Obama’s strongest supporters to question the sincerity of his motives in previous stimulus efforts.
For the first time since 1975, seniors will receive no cost-of-living adjustment next year. That is not a belt-tightening measure. It is because, for the first time since 1975, the cost of living did not increase.
Social Security cost-of-living adjustments are based on inflation, which is negative this year because of dropping consumer prices and lower energy costs. The purchasing power of seniors will increase over last year even without an adjustment.
Even if an additional stimulus was warranted, providing it to seniors does not fulfill the goal of giving funds to the most needy. Many seniors are within the category of the neediest Americans, but so are many non-seniors. And, many seniors are among America’s wealthy elite. As a group, seniors have been less affected by the most troublesome remnant of the recession, unemployment. Assets and income, not age, should determine who receives a stimulus payment if, indeed, one is appropriate.
Unless the goal is to reward the AARP for its support of Obama’s healthcare proposals and lure seniors into the Democratic column in upcoming elections. If that is the goal, then idealistic Obama has made a frighteningly quick retreat to the basest party politics.