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Wednesday, September 26, 2012

Fixing Indexing

Here is a novel approach on entitlements.
Right now they are indexed to inflation. Thus they go up and up and up.

Try inflation minus 2%.
Benefits go up more slowly than inflation, but not that much, only 2% less.
So if inflation is 2% or less, there is no increase.

If inflation is 5% then the increase is 3%.
I think we could all live with this and it would gradually bring the spending back into balance
with revenue.
Something must be done and this would be an elegant and palatable solution to the problem of government debt.

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