Looks like the administration is going to use $13 billion to give seniors year-end bonuses, since they won't be receiving a Social Security cost-of-living increase this year. (That's mainly because we're not experiencing any inflation right, in fact, we're almost on the line of deflation.) But despite the fact that prices aren't rising, the senior lobby wants them dollars, and wants them now!
I agree with AEI's Andrew Biggs when he says that "this is a case of both Democrats and Republicans bending over backward to do the politically popular thing for seniors." True! And normally, given the lack of price increases, I would also agree with him that "there is essentially no substantive case for this on policy grounds." But we're still in the midst of this whole economic collapse thing, at a time when the government still needs to support demand. Giving seniors this money will be an effective stimulus -- they're not likely to be saving a huge proportion of the cash -- that will help get the economy moving again.
The article also discusses new initiatives in the works to funnel TARP money toward small-business loans and community banks. That's good news, as well, in terms of improving the stagnant employment market.
But, wow, seniors are just the whiniest political constituency out there. But that's how organizing works; other interest groups could take a lesson.
-- Tim Fernholz