Obama Transfer of Money to the Wealthy

There have been devastating effects of the current recession on many millions of Americans. Unemployment hoovers around 10% and 300,000 homes a month are being foreclosed upon. The amount of real suffering should not be underestimated. However, one small economic metric has modulated. Inflation has been near zero and indeed for some months prices have decreased. As a consequence, social security payments, which are indexed to inflation, are not scheduled to increase this year. The Obama Administration has decided to give seniors a $250 check in addition to the $250 sent out to seniors in February at a cost of $13 billion dollars.

The irony is that these payments represent a transfer of money from the least wealthy to the wealthiest portion of society. The median wealth of those in the 60-69 age range is the highest in society. There are certainly seniors who are not wealthy, but the $250 payment is given to all social security recipients regardless of wealth or income. The transfer payment is regressive. Perhaps, wealth seniors ought to be encouraged to send their $250 check to their grandchildren who will be ultimately responsible for the repayment of the increase debt necessitated by the payment.

Why would the Obama Administration who talks about reducing economic inequality countenance a transfer of wealth to the flush elderly? Is it because the elderly have turned against Obama’s health care proposals and this payment might increase the popularity of Obama among seniors? As Obama asked, “Do we participate in a politics of cynicism or a politics of hope?”

Leave a Reply

You must be logged in to post a comment.