Thanks to Todd Walton
The new cost-of-living index proposed in Obama’s latest budget is really a means to push lower living standards on people who need Social Security, University of Missouri economist Michael Hudson says.
The blandly named “Chained CPI” would require Social Security recipients to select cheaper goods and services, effectively diminishing—if not destroying—their quality of life by creating an official policy justification for the issuance of smaller pension checks.
Hudson explained the switch in detail Thursday on The Real News Network:
It’s not really a cost of living index. It’s a “cost of lower living standards” index. Yves Smith calls it the catfood index.
Here’s what it does: Suppose that you have to switch away from eating steak or eating meat or eating fish to eating canned tuna fish or canned beans. That’s considered a price reduction. If the chained index is done “properly,” anti-labor economists can cut Social Security by 50 percent. Here’s how. If people stop taking cabs and begin to take buses, that’s considered a lower cost of living. Well, what if they buy a bicycle? All Obama has to say is, “Look, folks! If you really want to save money, get a bike.” That’s what Margaret Thatcher said. That was one of her campaign slogans: “Get a bike!” So all of a sudden, the transportation in the cost of living goes down to zero.
People pay between 25 percent and 40 percent of their income on rent. Let them live out on the street. Let them live in a homeless shelter … About 15 percent of their income is spent on medical care. Let them do what George Bush said: Go to the emergency ward. That’s free. So the cost of living goes down! More…