COLA - the cost of living adjustment - is just like the real thing. It artificially gets the economy racing but then the effect wears off. The long-term impact of the indiscriminate use of COLA on the economy is the same thing as the long-term indiscriminate use of caffeine. It gives you a false sense of energy.
When times are tough, like they are right now with the economy in a condition worse than a beggar's tattered clothes, all you hear are gloom-and-doom stories about businesses in financial ruin, families losing their homes to foreclosures and people losing their jobs.