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Monday, December 31, 2012

Chained CPI




The chained CPI is the latest republican proposal for saving our American government, saving an estimated $200 billion dollars over the next 10 years. This can be compared to the democratic tax increase that would raise $800 billion over 10 years, republicans will not support this tax increase because in will only fund the government for 7 days. The republicans support the reduction of social security by $200 billion as a major accomplishment in fiscal responsibility.
Chained CPI calculates the Cost of Living Adjustment (COLA) using a financial theory to produce a smaller social security check. The common explanation is that if steak cost too much people will buy chicken, chicken is cheaper and the cost of living increase is there forth smaller. With a limited amount of money you have to make cheaper choices, if you are rich and have plenty of money you are not forced into these choices. This is a policy that will only apply to retired people that are struggling to make ends meet.
If you can’t afford steak you buy chicken, now you get less money since you didn’t have enough money before, now you can’t buy chicken and have to buy fish, once again you get less money to buy fish, since you are now buying fish the money is reduced again, now you have to buy dog food for dinner, this cycle continues until you are eating dirt, which is free, and now get no money. This cycle only applies to those struggling, the 47% of Americans that are the “takers”. The rich will be unaware of this battle with malnutrition. Some of the more observant rich might notice that their sixty seven year old maid is looking sickly and moving slowly, but, they probably intended to fire her anyways.
The choice is simple, take $200 billion from old retired people and save America, or take $800 billion from the abundance of the rich, which will not make a difference.

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