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🇺🇸 Pop Goes the COLA

🇺🇸 Pop Goes the COLA

Plus, the Fonz would be shocked.

October 17, 2022

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Xi and China's Protest, Obama Over Dems, Fauci Free of Blame?

World: Xi Jinping’s path to power: From outcast to 'emperor' (POLITICO) + China protest: Mystery Beijing demonstrator sparks online hunt and tributes (BBC)

World: Biden will act 'methodically' in re-evaluating Saudi relationship (Reuters)

US: Odds of recession in next 12 months now 63 percent in survey of economists (The Hill)

US: Obama takes shot at cancel culture, calls Dems buzzkills (Fox News)

World: Russians flee to South Korea to avoid being drafted to fight in Ukraine (NBC News)

US: DC tent cities stain the nation’s capital (New York Post)

COVID: Fauci Claims Innocence on School Shutdowns: ‘I Had Nothing to Do with It’ (Yahoo) + Ontario’s top doctor urges mask wearing, warns mandate could return (Global News)

POLITICS

Pop Goes the COLA

Last week the Social Security Administration announced the cost of living adjustment (COLA) for 2023 will see retirement benefits rise by 8.7%, the highest bump in 40 years. This is in response to record inflation, which checked in at 8.2% on an annual basis.

Reporting from the Right: Biden slammed for claiming 8.2% inflation shows ‘progress:’ ‘What planet is this guy on?’ (Fox News)

Reporting from the Left: Social security increase: What to know about expected COLA bump (Associated Press)

From The Flag: Inflation rose from August by 0.4%, which was higher than expected. That said, the 8.2% year-over-year figure is lower than the annualized figure that was observed in August. Last month we covered the Fed’s most recent rate hike, which aims to combat inflation. Here’s fresh commentary from both sides concerning inflation, the overall economy, and this COLA adjustment.

LEFT-LEANING SENTIMENT

Fed Can’t Afford To Flinch, and Social Security Needs To Be Fixed

While the cost of living adjustment makes sense given rampant inflation, so does a reform of social security – despite being unpopular politically.
Although it carries a risk to the economy as a whole, the Fed can’t afford to relent in its fight against inflation, due to a shift in saving habits.
The COLA brings Social Security into focus ahead of the midterms, and Democrats should make it clear they intend to protect and expand the program.

“Enjoy the Social Security Bump Now. You'll Pay Later.” Allison Schrager, Bloomberg Opinion: “Social Security is known as the third rail of politics. President Joe Biden has pounced on all who dare even think about curtailing the retirement program. In fact, this week cash-strapped retirees will get the biggest cost-of-living increase in 40 years, an 8.7% boost to protect them from inflation. For many retirees on fixed incomes, that’s a godsend. Some Republicans are considering reforming the program, an idea that could be political suicide. It's also the right thing to do. The Social Security trust fund is expected to run out of money in 2035. At that point, taxes taken in will cover only 80% of the benefits paid out each month. If nothing is done, that could mean Social Security recipients are in store for a 20% benefit cut. …. But in the last year inflation has risen more than wages, which could hasten Social Security’s shortfall date.”

“Why the Fed must double down against inflation” Sebastian Mallaby, Washington Post Opinion: “After a miserable year in the financial markets, investors increasingly fear that the machinery could seize up. The recent chaos in Britain’s pension sector, which has forced the Bank of England to backstop government bond prices, might be an omen. … Yet, however real the risk of excess tightening, the opposite risk is scarier. … The longer the Fed takes to break the inflation, the higher the human cost of doing so. … The main change is that the advanced economies are aging. Mature workers save a lot, rendering capital plentiful. At the same time, their lack of spending appetite reduces opportunities for profitable investment. High savings and low investment point to a future of generally low interest rates once the current inflation spike is behind us. And low rates can be a problem. They leave central banks limited space to cut when a recession looms.”

One more opinion piece from the Left: The COLA — and the Social Security — Americans deserve Nancy Altman, Daily News Op-ed

RIGHT-LEANING SENTIMENT

Social Security’s COLA Is Flat, and Biden’s Economic Policies Cause Pain

The cost of living adjustment is toothless and will do nothing to help retirees because it’s a year late – the price increases it is tied to already happened, and inflation has yet to level off.
Despite warnings from economists, the White House pushed forward in pursuit of more spending, and now Biden shows neither contrition nor any understanding of his mistakes.
While the Biden administration and people on the left constantly talk about financial equity, their policies are disproportionately punishing low-income workers – many of whom are non-White.

“Social Security’s COLA is no bonus” Brett Arends, MarketWatch Opinion: “Social Security beneficiaries next year will get less overall than inflation, as in every year since 1984, because a growing percentage of their benefits will be taxed. Individuals earning more than $25,000 a year, and joint filers earning more than $32,000, will have to pay taxes on some or most of their benefits. As much as 85% of your benefits can be taxed, an absolute cheat because your contributions to Social Security were already made with after-tax money. … Social Security’s own trustees admit that the higher the inflation, the better it helps the trust fund at the expense of the beneficiaries. … (White House Speaker) Jean-Pierre added that ‘MAGA Republicans’ in Congress ‘continue to threaten Social Security and Medicare,’ although cynics would suggest pretty much everyone in Congress is threatening Social Security, either by their actions or their inactions.”

“Biden Deceptions and Inflation” James Freeman, Wall Street Journal Op-ed: “Despite warnings from leading economists from the Clinton and Obama administrations, Mr. Biden from the start of his presidency insisted on enacting massive spending increases based on his false claim that the US economy was in a shambles and in need of emergency federal intervention. It was never true. In the first quarter of 2021 when he took office, the U.S. economy was humming along at a robust 6.3% annual growth rate. … The Biden fairy tale of a struggling economy was used to sell his program of juicing demand with heavy spending. Meanwhile his regulatory activism discouraged supply, especially in energy. The result: too many dollars chasing too few goods. … Mr. Biden shows no signs of contrition or understanding and now he’s pretending that his failed policy mix will cure the ailment he helped create. It will not.”

One more opinion piece from the Right: Biden's Inflation Reduction Act is not reducing inflation Editorial Board, Washington Examiner

FLAG THIS

Inflation Is Top of Mind, Fueling Pessimism

Inflation was ranked number one when a survey asked what issues voters were most focused on ahead of the midterms (Rasmussen Reports).

A separate poll released last week indicated voters rank the economy (85%) and inflation (79%) as the most pressing issues (WaPo/ABC News).

Optimism is fading as well, with 46% now saying their financial situation is “poor” – up from 37% in March (AP-NORC).

Are economic issues (including inflation) your top focus ahead of the midterms?

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Master the Market, Van Gogh Game Night, Wine for the Cook

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WATERCOOLER

Capone Sentenced, Shazam for Birds, Transatlantic Seam

On October 17, 1931, gangster Al Capone was sentenced to 11 years in prison for tax evasion and fined $80,000, signaling the downfall of one of the most notorious criminals of the 1920s and 1930s. Above is Capone's criminal record as of 1932.

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Today I Learned Wales and Pennsylvania are two ends of the same coal deposit. Known as the "Transatlantic Seam," it was split by millions of years of continental drift.

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