No COLA’s Because There’s No Inflation?

The Salt Lake Tribune says that “The absence of a cost-of-living adjustment … will be a shock to older Americans already hit by plummeting home values, investment losses and rising health costs,” The New York Times wrote earlier this month.

Senior groups were predictably up in arms. An AARP spokesman moaned that “most seniors have never been through a year in which there was no Social Security COLA.” Some liberal bloggers accused the Obama administration of betraying seniors. And there’s already talk of legislation to address this perceived inequity.

But the outrage is unwarranted. Seniors have never faced a year without a COLA, but that’s only because they’ve never experienced a year without inflation, which is what the Congressional Budget Office says is what’s happening now.

The COLA is not supposed to be a “raise” in Social Security benefits, even if seniors often see it that way. Rather, when the consumer price index, or CPI, rises…”