Under New Proposed Inflation Measure Seniors Would Lose $720 per Year in Social Security Payments

Economic Policy Journal ^ | 7-18-2011 | Robert Wenzel

[blam]

Under New Proposed Inflation Measure Seniors Would Lose $720 per Year in Social Security Payments

Economic Policy Journal
Robert Wenzel
July 18, 2011

As I have pointed out before, as part of the current deficit-reduction talks, White House officials and Congressional leaders on both sides of the aisle are advocating changes to the way inflation is calculated by using a method to measure inflation known as the "chained consumer price index."

This method would likely result in a slower inflation adjustment rate payment on social security. So if you think the current CPI doesn't reflect price inflation accurately, just wait until the SS administration starts using a Congressionally approved 'chained consumer index".

According the the Senior Citizens League, the average retiree would receive about $720 per year less in inflation adjusted benefits. But the SCL is assuming real price inflation rates around current levels, if price inflation accelerates, as is likely, the reduction in adjusted benefits based on the current measure of CPI will be much greater on an annual basis.

This fraudulent indexing scheme that will screw seniors is being hailed by some as a method a positive step social security. "This is a start in helping us fix Social Security," says David John, a senior fellow at the Heritage Foundation, according to Smart Money. If Bernie Madoff ever proposed such a thing he would of ended up in the slammer, much earlier on in his Ponzi scheme than he did.

The United States shouldn't be in the savings business at all, as is evident, they will use the money to engage in wars and otherwise siphon money off to the politically collected. That said it is an outrage that the government will play with the promised income of the elderly, many of whom trusted the government and have no other sources of income.

[ONEBYEONE]

Your post gave me this idea. I wish someone on FR would tack a weekly update of set items and their prices. Let all of us post the price of that item during the week. I know a can of Folger’s Decaff was running about $6.50 two years ago and now it’s about $11.00.

[Rashputin]

"My grocery bill has increased by at least 1/3rd, probably more."

You got that right. No matter what the prices are I have the same amount of money every month and there's no slack in anything. Everything is stretched nearly to the breaking point around here. I have a really good sob story but every day since August of 1970 has been pure gravy, so I'll just keep my tale of woe stowed.

If it goes much further, though, it's praise the Lord and pass the ammunition because I didn't put up with the crap I've put up with in this life to leave a ruined country to my kids and grand kids.

JMHO

Regards

[NTHockey]

So what, payments haven’t been increased for two, going on three years. But Congress will get its raise, without even voting on it.

[dforest]

There has been no COLA in SS for two years now in spite of inflation.

What increases? How about Congress putting an end to their automatic pay increases. How about reducing the amounts on ebt cards for food and fun. How about no earmarks and pork. How about booting illegals out of the system?

Nope, we are going to cut old folks and deny them health care.

Way to go America.

[TomGuy]

the average retiree would receive about $720 per year less in inflation adjusted benefits

Seniors have averaged zip, zero, nada increase the last 2 years. [Where is that $250 Nancy P promised?]

Politicians who cut current Social Security amounts will feel the wrath of The Gray Panthers. I doubt many of the politicians up for reelection will see this as such a grand idea.

[TomGuy]

I wish someone on FR would tack a weekly update of set items and their prices. Let all of us post the price of that item during the week. I know a can of Folger’s Decaff was running about $6.50 two years ago and now it’s about $11.00.

One problem with that is many packages have been reduced in content size, while the price remained the same or actually increased.

To compare like products would require a lot of math calculating to maintain a cost-per-ounce or similar comparison.

I have noticed many product prices fluxuate 25% or more up or down from month to month. Fresh produce has substantial swings, for example.

Right now, in my town of 14k, celery ranges from $1.29 to 1.99, depending on which one of the 4 major grocery stores one uses. Pears from $1.00 to $1.49/lb. Bagged salad (12 oz) from $0.99 to $1.79.

[Petruchio]

Hell, by me Bell Peppers are $1 each!

[MontaniSemperLiberi]

50 million people living off the taxes of 131 million workers. Wow.

[KDD]

What the taxpayer paid for just one of the bank bailouts would have back-stopped SS for 200 years. End the Empire Nation Building Wars and fix our own damn problems here at home. Going after Seniors’ retirement will sweep the GOP out of any political power next election. The third rail of politics still applies. There is a reason the GOP is called the Stupid Party. Trying to redefine Social Security as welfare will undo the Party.

http://www.aarp.org/politics-society/advocacy/info-04-2011/AARP-fights-against-threats-to-medicare-and-social-security.html

[MontaniSemperLiberi]

According to the CBO, all the bank bailouts cost $189 billion.

http://www.cbo.gov/ftpdocs/121xx/doc12187/ChangesBaselineProjections.pdf

This would fund SS for about three months. http://www.fms.treas.gov/mts/index.html I’m sure you feel strongly about this issue but the facts are not on your side.

I think most people would realize that 50 million elderly and 60 million people total living off of the taxes paid by 131 million working people is a bad, bad idea. Without changes, many of those taxpayers will be leaving this country. We are a transient culture. Those left behind will envy the Greeks.