AARP, where are you when we need you?? | Eastern North Carolina Now

    Publisher's Note: Jim Bispo's weekly column appears in the Beaufort Observer.

    The Wall Street Journal, in a front page article (9/22/11), proclaims that Mr. Ben Bernanke has launched off into a stimulus plan of his own. He would seem to have exhausted all the running room he had for so called "Qualitative Easing (1 & 2). He is still working to keep interest rates down. Based on the interest rate one can earn on CDs today, he seems to be succeeding.

    For years and years, seniors have been conditioned to reflexively resist any changes, no matter how minuscule, having to do with Social Security. Historical note to politicians: Fool with Social Security at your own risk. Those days may be gone.

    Now, so many folks are talking about its impending bankruptcy that almost everyone seems to be adjusting to the notion that something must be done to preserve Social Security as we know it. That would be after the surprise discovery that there wasn't really a "locked box" with all the FICA withholdings in it to be used to cover the ever growing demands on the Social Security program. We can thank LBJ and his "unified budget" for that bit of sleight of hand. As I recall at the time, the change was allegedly in the interest of full disclosure. LBJ?? Honesty; integrity; full disclosure?? Hmmm...

    Talk of extending the age at which folks become eligible for Social Security is no longer enough to send a politician to the showers. While a lot of folks don't like the idea much, it doesn't seem to be the "third rail" that it once was.

    Seniors would seem to have been smart enough to look out for their own interests; and more power to them.. What does seem odd, however, is how they have let the Chief Community Organizer and his minions rob most of them of earnings on any money they may have succeeded in putting away for their old age. That would be Mr. Ben Bernanke and his Quantitative Easing programs 1 & 2 where he created tons of money out of thin air in an effort to help the economy by keeping interest rates low..

    According to Polyana da Costa in Bankrate.com, "The quantitative easing program, or QE1, concluded in the first quarter of 2010, with a total of $1.25 trillion in purchases of mortgage backed securities and $175 billion of agency debt purchases."

    QE1 was intended to bring interest rates down, and it did that.

    In QE2, in an expanded effort to keep interest rates low, an additional $600B was created by the Federal Reserve, again out of thin air. The fact that there is even a whisper about a possible QE3 is certainly a great testament about how well the administration believes QE1 & 2 worked.

    The seniors must have not focused on what these efforts were doing to them, because they certainly didn't kick up any fuss about what the anointed one and his Fed Chief were up to. What the Fed did was render virtually worthless any savings the seniors had managed to put aside for their so called "golden years". By forcing and keeping interest rates low the QEs succeeded in robbing the seniors of a whole lot of interest income.

    And now, in the name of further stimulus, the Fed is "adjusting" its long term portfolio in an effort to reduce long term interest rates (which are already outrageously low) and keep them that way. The already pitiful interest being paid on CDs will go even lower. So what do you suppose that will do the seniors?? Who will these tactics hurt?? Those who conscientiously saved for their retirement or the spendthrifts who blew through all of their check every payday?? There are those who would suggest that the pre-boomer population falls into the first category. No comment about who might comprise the second category.

    So there we were worrying that someone might be willing to fool with our Social Security while we heard, but didn't pay much attention to, those who would take our interest from us in the guise of "fixing the economy". It isn't clear that all this government generated low interest has helped the economy much, but it is certainly clear what it has done to the interest that can be earned on savings.

    Enter AARP, the protector of American seniors. The AARP continues to look out for the seniors. They advertise all manner of "member benefits": Discounts, Insurance Products, Travel Benefits, Health Products, Financial Services, Volunteering, Programs & Events, AARP Publications, AARP in Your State, Membership, Advocacy. They seemed to be so busy with their insurance products, travel benefits and health products that they didn't seem to even notice what the Fed was doing to the senior's interest earnings. Maybe they simply didn't care; so much for advocacy. About all they seemed to care about was increasing their income from peddling their various products to seniors. I would hardly call that looking out for the interest of seniors.

    So, where is the AARP when you need them?? Probably at the counting house, counting out their money. The seniors be damned.

    D'ya think??