Social Security benefit freeze for second year in a row - reason, low INFLATION?

[beforeyoureyes]

I don't know what their formula entails, but it certainly doesn't reflect the reality of modern pricing. Groceries seem to go up exponentially every MONTH (. And, the Chinese are price gouging for crap at this point because they have driven off the competition and the rates for poor quality third rate goods are double to triple what they were two or three years ago. Everything is so expensive and poorly made. Talk about bizarro world.

http://news.yahoo.com/s/ap/us_social_security_no_cola

WASHINGTON – More than 58 million retirees and disabled Americans will get no increase in Social Security benefits next year, the second year in a row without a raise.

The Social Security Administration said Friday inflation has been too low since the last increase in 2009 to warrant an increase for 2011. The announcement marks only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year.

The cost-of-living adjustments, or COLAs, are automatically set each year by an inflation measure that was adopted by Congress back in the 1970s.

To make up for the lack of a COLA, the House will vote in November — after congressional elections — on a bill to provide $250 payments to Social Security recipients, House Speaker Nancy Pelosi said. But even if Pelosi can get the House to pass the proposal, it faces opposition in the Senate.

Link for more...

[bluestateguy]

1. Low inflation for some things anyway

I can tell you that that alleged low inflation is not showing up when I go to buy meat and cheese at the grocery store.

[beforeyoureyes]

7. It's everything. Everywhere we go, my husband points a item and says...

Do you know how many hours at minimum wage you would have to work to buy this?

And, then we figure a bag of oranges at minimum wage would be 2 hours after taxes. A energy drink, 1/2 hour. A shovel, one day.

The politicians in Washington are utterly and totally clueless to the reality of cost of living for most Americans. They desperately try to find formulas that will skew reality and give a false perception of the state of the country. All lies. Unemployment rates, lies. Poverty line, lies. Cost of living rates, lies.

Lies.

And, then they create policy on the lies and congratulate themselves on achieving a state of non-reality low inflation.

If this is low inflation, I am absolutely dreading high inflation.

[Yupster]

9. The government inflation index

is made up of 40 % housing, so as long as home prices are dropping, you can't see inflation in that index no matter if everything else is going up.

Personally, I don't spend anywhere near 40 % of my income on housing, but maybe the average person does. Or that's what the government says anyway.

[Statistical]

18. To be fair the 39.7% for housing isn't just mortgage it includes utilities.

Actual residence cost (rent or mortgage), utilities, reapir/maintence, furnishing and insurance are all subcomponents of that 39.7%

http://www.bls.gov/news.release/cpi.t04.htm

[stray cat]

21. unless you live where housing is expensive then its considered 50%

[Speck Tater]

2. Let me guess. Congress also froze their OWN wages. Yes? No? nt

[Uncle Joe]

5. No, the price of kneepads has skyrocketed. n/t

[tammywammy]

15. Congress is not getting a raise either. n/t

[AngryAmish]

3. Groceries that cost $100 last year cost $285 this year?

And will cost $894 next year?

[sufrommich]

6. Where do those numbers come from? nt

[AngryAmish]

11. Take 100, multiply it by 1.1

Do it twelve times. Then do it 24 times.

MAgnets, how do they work?


on edit: My numbers are off, a bit low.

[sufrommich]

12. Good lord, that's pretty dumb. nt

[beforeyoureyes]

13. I wasn't being literal - I said seems - and it does seem that way

When every month, you can buy less and less for the same amount of money...

I grocery shop every week, and I don't keep exact figures but my orders get smaller and smaller for the same money. And, it is a rare occassion when I don't hear someone in line expressing shock at the price of a certain item or their entire order.

And, the ever popular, 'I am glad I am not trying to feed my kids today....I don't know how the young people today do it'!

[gristy]

4. Well, no. This can't be true: Groceries seem to go up 10% every MONTH

It may seem that way sometimes, but it certainly is not true.

[beforeyoureyes]

10. Groceries are skyrocketing. Packages get smaller. Every month, you can buy less and less

You are right, probably not 10% across the board, but with many items, I notice big price jumps.

[pnwmom]

8. The question isn't whether they've been going up LATELY.

The question is whether, prices having had a dip around 2008, they've finally risen again to 2008 levels -- the level at which current SS payments were set. According to the CPI, they haven't. So even if they have been rising all year, until they exceed 2008 levels, there won't be another COLA.

Part of what has made this confusing is that after prices declined, the SS payments remained the same -- rather than also declining. So to anyone who entered the system since 2008, all they've known are rising prices but stable payments -- but that's because the payment they're getting now was actually computed based on a 2008 CPI which was higher than our current CPI.

[Bluenorthwest]

16. It is not confusing. The people who get those benefits

know exactly how the COLA is rigged, and rigged it is. The payments did not decline because that is the law, they do not go down with 'deflation' by law. Everyone knows when the COLA was last altered. To imply that people are 'confused' because the law is being followed when the payments do not decline is odd and not supported by facts. Why would anyone be confused by the process working as the law orders?
The point is that the computation of the COLA itself is not reflective of the needs of those who receive those payments.

[Statistical]

23. "COLA itself is not reflective of the needs of those who receive those payments"

Do you have any statistical analysis to show that.

Would be pretty simply study for a university to do. Take consumption/spending habits of representative sample compare to breakdown in CPI-W. Maybe we need a new CPI-S (seniors) but without facts it is just a claim.

Of course if CPI-S indicated a lack of COLA you would be fine with that right?


CPI-W basically breaks down to....
16% food
39% housing (w/ includes insurance, maintenance, utilities, and repairs)
4% apparrel
18% transportation (auto, other forms of transportation, cost of fuel/gasoline, plus shipping costs/services)
6% Medical care
5% Entertainment/Recreation
6% Education & Communication (to include internet & cellphone services)
4% Other

Likely senior break down is different (less for housing & transportation, more for medical).

[pnwmom]

29. Right. All the people who get SS know exactly how the payment

is computed, and what the CPI is, and how it determines the payment.

:sarcasm:

[tammywammy]

17. +1 for facts n/t

[Statistical]

26. Stop w/ all the facts and logic. It is unpopular in this topic.

Facts? We don't need no stinking facts.

[lib2DaBone]

14. Low inflation except for the things you need everyday.....

Gasoline is up 10 cents a gallon this week alone. Diesel fuel is up 40 cents... this of course translates into price increase in all foods and goods shipped by truck.

The dollar is down to .77 on the usdx ...as Geithner and the boys pursue their currency war.. which will be paid for by guess who?

The politicians in Washington are absolutely INSANE and devoid of all reason or reality.

[Statistical]

19. Gasoline prices are included in CPI as are transportation prices, and medical services.

Prices are up in 2010 from 2009 but they were down in 2009 from 2008 and nobody cut SS checks when prices went down.

Until prices rise above 2008 high then SS checks won't rise.

[ThomWV]

22. Someone tell me insurance companies that pries were down

or the grocery store, or the County Tax Assessor, because that son of a bitch thinks differently than you.

[Statistical]

24. CPI-W indicates prices have ROSE.

CPI-W is up 1.4% year over year however CPI-W was DOWN in 2008 and SS checks weren't decreased.

Had SS checks decreased last year we would see an increase this year however no decrease when prices are falling = no increase when prices are rising.

Once CPI-W exceeds the 2008 high then there will be a COLA increase and the amount of the increase will be difference (in %) between CPI-W high in 2008 (215.5) and the CPI-W for 2011.

[stray cat]

20. How many have gotten pay raises consistently for the last two years?

[shraby]

25. Difference..pay raises are paid by the hour..SS raises

are paid by the month..to the tune of 5-10 dollars. Lotsa difference. Then when they give a raise, the medicare part B goes up, sometimes more than the raise.

[Statistical]

27. In % terms they are exactly the same.

5% raise in a wages vs 5% raise in SS.
0% raise in wages vs 0% raise in SS.

[JackRiddler]

28. Food, fuel, what do you need those for?

[taught_me_patience]

30. Low core inflation

There is inflation when factoring in food and fuel. Of course, those are unnecessary to living...:sarcasm: