Being “under the bus” with COLA

We all must face one certain fact…our economy is in the toilet. It wasn’t your fault; I wasn’t my fault , but maybe it really was. Actually it was the fault of our elected politicians in Washington for not doing the people’s business… but we put them there. I know many would like to argue the point, but that facts are too blaring to ignore once we get past the rhetoric, name calling, and politics of it all.

I was once asked to run for public office. It took me about one nano-second to say no. I have been around long enough to know that political office has a way of corrupting those in office and I have prayed my whole life, “lead me not into temptation” as part of my daily prayers, knowing, as pointed out by Colin Powell, that one soon becomes like those with whom he/she associates. There really is truth in the oft quoted words of Lord John Acton (1834–1902), “power corrupts and absolute power corrupts absolutely”, but probably even more truth in the words of William Pitt the Elder, “Unlimited power is apt to corrupt the minds of those who possess it”. Wow…is that ever an argument for term limits, which perhaps we should discuss another day.

Getting back to the issue of the economy and why Washington and the Beltway crowd is in absolute chaos, some idiotic politicians (and there’s plenty of blame to go around starting with the Clinton Administration and perpetuated further by the Bush Administration) thought it would be nice that every family in America could own their own home. This idea was pushed forward at break-neck speed by an over-zealous Congress that went to ridiculous lengths to increase the national homeownership rate by promoting paper-thin down payments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. Even when the faults of such illogical thinking were brought up in Congressional hearings, the government looked the other way. These are the same folks we the people elected.

In reality they were giving the voters another “gift” which would enhance their chance for re-election. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, lead to the housing boom, great times for all to cash in on the housing bubble, and later led to waves of defaults by people who never should have bought a home in the first place. Home ownership carries with it a responsibility to maintain the property, and pay the mortgage and taxes, which many found they couldn’t do because government policies, forced upon the mortgage industry, did little to scrutinize the credit worthiness of the buyers.

Lord Acton and William Pitt have been proven absolutely correct regarding those in power. There comes a point when people simply won’t question what is being done to them in the name of “for them”, by elected politicians so eager to gain more and more power and thus continuing the cycle toward absolute corruption…in this case nearly bankrupting the government. The damage may be permanent and America might never recover from the massive debt created by a “do everything” government that is hell-bent on being all things to all people.

So bad is the situation in Washington and at the state level, that with the unemployment brought on by the housing bust, no government agency can muster enough money to meet its financial obligations. For those screaming to “make the rich pay their fair share”, it might be important to note that if you were to confiscate all the money and assets of “the rich”, it wouldn’t even pay the interest on the $14 trillion plus national debt. TAXING is not the answer. Getting the economy moving is, because the only way to get out from the mess created in Washington is to allow market forces to work.

What does this mean? It means getting everyone back to work (full employment would mean an unemployment rate of between 4-5%), which in turn would begin to move the wheels of the economy. As an example: You go to work, earn your wage, take you paycheck and buy things. Pretty simple…you pick and chose what you want to purchase, essentially voting with your dollars, what is important to you and your family. When you buy a car, you provide revenue for the car company which then purchases the parts that go into making the car, providing jobs and more revenue into the system. We certainly do not need government anywhere near this equation. In short we solve the employment issue and we solve the economic issue.

The problem we find ourselves in today is that because of government intervention, the private sector is unwilling to move forward in spending money to make purchases or to hire more workers because others are not spending money either. It is a self perpetuating nightmare, compounded by the government whose policies got us here in the first place. Government can not solve the problem with mandates and make-work programs as The Great Depression should have taught us. Unemployment was as high 33% in 1933, and never got below 15% despite all the government created jobs. It was WWII and the full-production of the workforce that got the economy moving.

With the shortage of government revenue at all agency levels, printing more money is definitely not the solution because that creates the worst kind of tax on the population…inflation. The cheaper our currency becomes, the more dollars it takes to purchase the same amount of goods and services that we were able to buy prior to inflationary pressure. Those on fixed incomes, Social Security, Veteran’s pensions, disability pensions, and Medicare, Medicaid recipients feel the pinch more quickly than those in the workforce, but eventually the higher cost for goods affects everyone, leading to a demand for higher wages and the need for Cost of Living Adjustments (COLA) for those on fixed incomes, which only add to the inflation spiral.

This is a dilemma for those who hold public office. Tough decisions need to be made and that’s where most politicians don’t want to go. Politicians are used to thinking “short-term”. How else to explain why they do such stupid things. It is apparent that most decisions are made with getting re-elected in mind and not the long-term consequences of those actions. The thought is that the citizenry has short memories and are quick to forget bad and errant behavior. To emphasize this point, most people do not even realize that Congress didn’t even pass a federal budget in 2010, choosing instead to run the government on “continuing resolutions”, despite the fact the Democrats controlled both house of Congress and the Presidency…talk about dereliction of duty! This is like running your household without a budget or like a business operating without fiscal restraint…enough to have everyone in a management position fired.

Going into 2011, our government faced one budget crisis after another and finally the voters said enough is enough. In the last election, the voters threw out a bunch of “has-beens” in the House of Representative, many who had been around for decades. They didn’t go far enough and barely even touched the Senate. I hope the next election brings similar results, as we must hold them accountable for all the havoc that has been placed upon the next generation of Americans.

The situation is so bad inside the Beltway, Congress and the President couldn’t even come-up with a plan of budget cuts and taxation (other than start a class war shouting “tax the rich” who already pay more than 80% of the federal income tax – as much as 50% or more of what they earn to the Taxman). They placed that budget cutting job on a select “Super Committee”.

The committee, made up of the same members of Congress (six from the Senate and six from the House), are among the same group which couldn’t do their job in the first place. The committee, along with their estimated NET WORTH, includes:
John Kerry Senate D-MA $182,755,534-$294,869,059
Fred Upton House R-MI $7,010,173- $25,651,000
Rob Portman Senate R-OH $6,469,080 -$14,965,000
Dave Camp House R-MI $2,966,100-$10,515,000
Pat Toomey Senate R-PA $1,127,038-$2,905,000
Jeb Hensarling House R-TX $928,025-$2,270,000
Jon Kyl Senate R-AZ $519,090-$746,082
Patty Murray Senate D-WA $449,017-$1,185,000
James Clyburn House D-SC $212,010-$582,000
Chris Van Hollen House D-MD $148,007-$445,000
Xavier Becerra House D-CA $100,054-$1,424,999
Max Baucus Senate D-MT $13,013-204,000

Yup, these politicians are just ordinary folks like you and me (I can’t figure how Max Baucus got into this group). I’m sure they “can feel our pain”, and are suffering along with the general population during these trying economic times…ooopps, I forgot about the cushy benefit package with which we bestow upon those in Washington. Anyway, it is what it is, and our fate is left in their hands…including the COLA that yet needs to be decided upon for Veterans.

Here’s the real problem I see for anyone in Congress that would have the, excuse the expression, “balls”, to turn their backs on Veterans. Federal employees, already the recipients of higher paying jobs than those in the private sector, have done far better over the last decade than John Q. Public. Below is how their wages have benefited from COLA (You don’t have to add it up; I already did that for you…it amounts to 31+% wage increase over the decade). Has your income level done that well (that is if you still have a job)?

January 2012 3.6
January 2011 None
January 2010 None
January 2009 5.8
January 2008 2.3
January 2007 3.3
January 2006 4.1
January 2005 2.7
January 2004 2.1
January 2003 1.4
January 2002 2.6
January 2001 3.5
January 2000 2.5

We the Veteran, instead of being at the top of the heap, are actually in a position, because of the need for the government to atone for their wild decade-long spending spree passing out goodies to insure re-election (better known as CYA), now may have to take the brunt of budget cuts. They call it “shared sacrifice”, which is a euphemism for “we screwed up but don’t want you to know it and we will never admit it anyway”. The military budget is a big target and there looks to be little hesitancy on the part of the military hierarchy to once again, throw us under the bus. But not to worry, government employees and pensioners, are sure to be protected by a government that believes in sharing the wealth of others. If we don’t wake up now to what’s going on, will we ever?

The committee will have until Nov. 23 to propose ways to reduce deficits, and those proposals must be voted on by Dec. 23. If the committee fails to produce a debt reduction plan, as much as $1.2 trillion in across-the-board cuts would kick in evenly divided between defense and non-defense spending. The Super Committee has the power to stop any COLA for Veterans, and there is rumor which seems to indicate they are in the process of not giving it to Veterans for 2012. Not only are veterans in danger of losing their 2012 COLA, those on Social Security will be held hostage to a rigged COLA-calculating process which really doesn’t provide for the true inflation rate. I mean, does anyone really believe the price of gas, potatoes, bread, and other goods has only gone up 3.6%….come on!

If you are on a Veteran pension AND Social Security, you are getting screwed twice.

Even the liberal USA Today “ain’t buying it”… “A decision to base annual cost of living increases on the new calculation would lower Social Security costs by $108 billion over a decade, and the impact on benefits for federal civilian and military pension programs and veterans’ benefits would save an additional $23 billion, according to calculations made in February 2010.”

I strongly urge every Veteran to step to the plate and write your Senators and Representatives, sending a copy to those on the Super Committee as well. Tell them, their actions will not be forgotten this next November. For those amongst us who don’t give a rat’s behind, simply sit on your hands and do nothing, but please to come crying about your situation the next time you feel the need to whine.

Ed Mattson

Following his service in the Marine Corps Ed Mattson built a diverse career in business in both sales/marketing and management. He is a medical research specialist and published author. His latest book is Down on Main Street: Searching for American Exceptionalism

Ed is currently Development Director of the National Guard Bureau of International Affairs-State Partnership Program, Fundraising Coordinator for the Warrior2Citizen Project, and Managing Partner of Center-Point Consultants in North Carolina.

Mr. Mattson is a noted speaker and has addressed more than 3000 audiences in 42 states and 5 foreign countries. He has been awarded the Order of the Sword by American Cancer Society, is a Rotarian Paul Harris Fellow and appeared on more than 15 radio and television talk-shows.