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Posts Tagged ‘social security’

I posted an article yesterday on this as well, it is amazing how big an impact this will have on our economy, simply due to the fact we have so many dependent on it to live.  The duplicity of the deception is that they say there is no inflation (Really?  Have they gone grocery shopping recently?  Oh that’s right they exclude groceries from their numbers), which there is, but the Fed is working to increase inflation over the next year because they say it is too low…

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No Cost of Living Hike to Social Security Next Year

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.

(more…)

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Who would have thought that such a small thing could have such a big impact on our economy.  It just shows how dependent we have become on the government.  This is huge, and it will probably just be a blip, if even that, for most folks on a news ticker…

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No COLA – Bernanke gets Trumped?

Social Security announced that there will be no increase in benefit levels for another year. The reason? Deflation. Based on the Cost of Living index no increase in checks is justified. You might get an argument on that from the 60+% of the beneficiaries whose primary source of income is SS. This will impact the macro economic picture.

In the period 2000-2008 the average COLA increase was 3%. Because of the big eco dump it has been zero for 2010 and now again for 2011.

SSA will pay ~$700b in benefits this year. 3% of that comes to $21b. That is a pretty important number. Most of the SS checks are spent. Little of it is saved, so this will impact consumption on a nearly 1 to 1 basis. $21b is 1/4% of our GDP (includes multiplier). Poof!

Does this matter? Sure it does. Economists who forecast growth will have to knock down their numbers by at least ¼% (more…)

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