Question: Why was inflation not more of an issue in the recent election?
Why did Democrats escape a lot of the blame for sky-high price hikes?
Answer: Because the Democrats made sure that 37% of the American people did not feel full impact of inflation. Their government benefits or their private incomes included cost-of-living adjustments and other protections against rising prices.
The elderly and those on fixed incomes typically feel the impact of inflation most severely. But cost-of-living adjustments, (called COLAs) shielded the elderly from feeling the impact of inflation. Even though prices rose by nine percent in 2022, their incomes also rose by 9% at the end of the year.
While the elderly blanched at rising prices throughout the year and had to lay out money to pay for them over the months of 2022, at the end of the year, a few weeks before the election, they got big fat checks from the Social Security Administration reimbursing them for inflation.
Other federal benefits are also indexed for inflation such as disability payments, food stamps, Medicare and Medicaid reimbursement. These core Democratic constituencies did not feel the inflation of 2022 nearly as much as the rest of us did and, as a direct result, didn’t vote to turn out their Democratic benefactors.
Likewise with unionized private sector worker, most of whom were protected by COLAs, also saw that their paychecks were shielded from inflation.
In fact, we begin to understand more easily why the Democrats found inflation to be not much of a problem and, indeed, may have seen it as a political opportunity.
The other 63% of Americans, without COLA protection, were left awash in a deep sea of inflation. But the Democratic Party took care of its own affording islands of protection, through cost of living adjustments.
The worse inflation became, the more valuable the COLAS were. Indeed, many of these constituencies came to celebrate inflation as their benefits rose at year’s end.
What damage inflation inflicted on the US economy! Savings shrank, productivity was imperiled, investments were distorted and debtors triumphed while lenders lost out. But the Democrats felt no pain from big spending, growing deficits, and a crushing national debt. Like a dentist’s patients who, on Novocaine, do not feel his drill, they happily benefited from government spending and borrowing with no pain. There was no political incentive to curb inflation and even some incentive to accelerate it.
The analysis below, generously provided by Rick Manning and Robert Romano of Americans for Limited Government, shows how widespread COLAs are throughout government benefits.
Information on the number of Americans on government programs who received Cost of Living Adjustments:
There are 57 million seniors but about 52.7 million collect Social Security and Medicare, which include COLA adjustments. Another 5.6 million are either early retirees or young survivors who also collect Social Security.
There are also 89.9 million Americans who receive Medicaid that also includes COLAs, but 6.4 million are seniors and also included in the above 54 million, and 40.9 million are children in CHIP and so are not of voting age. The remaining 42.6 million are adults, however, and are not seniors. SNAP beneficiaries get COLAs too but they appear to be a subset of the Medicaid population (individuals tend to receive both, for example 89 percent of SNAP children also get Medicaid). That said, another 1.6 million children collect SNAP but don’t have Medicaid.
There are also 12 million who receive Social Security because of a disability but they are most likely on Medicaid with the disability waiver, too, so no need to count them twice. There is the possibility of Social Security disability recipients who have not yet gotten the disability waiver, but it won’t change the bottom line by that much.
Bottom Line: there are 99.6 million adults who are some form of public assistance that get COLAs as a part of the benefit. If you include children who are also on COLA-based programs, the number rises to 137.8 million. There are still some overlaps not accounted for here (for example early retirees who might have collected Medicaid too but that would be very rare) but I think that’s roughly correct.
For the adults, that constitutes about 37 percent of the working age population that receive COLA-adjusted public assistance. (See Here: https://data.bls.gov/timeseries/LNU00000000)
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