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Sticky Benefits
As this CBPP chart points out, there was no net inflation in 2009, which means that Social Security recipients won't receive a benefit increase in January. Sacre bleu! That can hardly be allowed, so naturally politicians are taking swift action:
President Obama on Wednesday attempted to preempt the announcement that Social Security recipients will not get an increase in their benefit checks for the first time in three decades, encouraging Congress to provide a one-time payment of $250 to help seniors and disabled Americans weather the recession.
....An increase in benefit checks each January has been a yearly ritual since the mid-1970s, when the government moved to ensure that its subsidies to retirees, pension recipients and others who receive Social Security benefits kept pace with inflation. Thursday's announcement by the Labor Department will mark the first time that the federal formula used since then, which is tied to the consumer price index, will translate into no increase at all.
Now, I don't really have any objection to giving seniors an extra little bonus this year. Their 401(k)s and whatnot are sucking pretty bad, so why not? A little extra stimulus is a good idea even if this isn't the most defensible use of federal money I can think of.
Still, this does go to show the power that sustained inflation holds on our imaginations. Technical arguments about CPI calculations aside, the fact is that seniors haven't gotten a benefit increase for decades. It's just not the way the program works. But the fact that their checks keep going up makes it seem like they have. So now, despite the fact that the huge benefit increase of last January combined with the deflation of the past 12 months means seniors really are getting higher benefits for the first time in recent memory, it doesn't seem like it. So adjustments must be made and appearances kept up. Sticky wages indeed.
So we have Atrios and plenty
So we have Atrios and plenty of others rationalizing this sort of bribery and basically taxpayer ripoff to a special interest group.
This is why we have special interest groups.
It's only money.
This storyline reminds me of
This storyline reminds me of the Simpsons, where Grandpa Simpson complains about the size of the government and all its programs and then starts yelling "gimmie, gimmie, gimmie" when his SS check is late.
Why do the rest of working
Why do the rest of working taxpayers have to pay for this crap though?
My 401(k) is sucking pretty
My 401(k) is sucking pretty bad too! Why do I have to suffer that and pay for some other a-hole to get free money out of nowhere from the government?
Min Wage
Any chance we can get min wage tied to this also, so we don't have to go through the posturing every few years that this will destroy the economy. Say bump the min wage automatically every 2-5 years.
p.s. whaa whaa....they're taking money from the workers. Ok, so nobody complains when they took our money to subsidize the oil industry. You know that industry that labors under record profits.
I'd much rather my tax
I'd much rather my tax dollars be spent on seniors than on bailing out the financial industry grifters who caused the global economy to tank in the first place....Oh wait, though, I just remembered: those financial guys are -- what's the term? -- "to big to fail." Whereas those old people have probably been taking up space long enough, and a lot of them probably haven't added anything to the economy for five, maybe even six, years, right?
What's wrong with you people? Has the Mother Jones readership been highjacked by the republican national committee?
I'd prefer my TAXDOLLARS be
I'd prefer my TAXDOLLARS be spent creating jobs and infrastructure.
Apart from the claim "they'll spend it" when the money is to be shoveled to any senior, not just seniors who have medical bills or mortgages or rent that needs paying, it's not clear to me that any senior needs that dough and won't just stuff it in the bank.
I could use the tax break though so I can pay medical bills and rent and buy some food.
But I do appreciate your hand in my pants groping for my wallet, while you're there, think you can give my dick a little rub?
Spending always goes up...
Sigh.
You really think we're going to be able to "bend the cost curve" after these stories keep coming down the pike?
Hell, we can't even keep SS checks from going to rich seniors.
Ask the banking industry for
Ask the banking industry for that break you need, 1:03 -- I'm sure they'll be able to figure out how to take the money from your granny and give it to you.
Personally, I'll take my
Personally, I'll take my stimulus where I can get it.
Seniors and SocSec
The average 401k of persons 65 and over fell by more than $13,000 from 07 to 08, down to $46,000. (Data are from Vanguard Group) Given the fall in net worth and the lack of time to make that money back, a $250 check doesn't seem like bad recompense.
More interesting is the idea of expectations of inflation, which is behind this move, but is really the driving force in rising health care costs. I've worked with health actuaries, and their job is relatively simple, except they have to project whether health inflation is going to be 8% next year or 18%.
They never project 0% increase, and of course would be wrong if they did. If any part of the health care system raises costs, the buyer doesn't fight back, he/she just passes it down the line. In the end, the consumer ends up paying more. But the consumer doesn't feel it, since it is an invisible cost. (Essentially, the increased health cost takes away from the raise the employee would have gotten.)
In the meantime, costs keep rising and productivity gains that could be employed never are. (Have you noticed that your doctor has to make two Xeroxes of your insurance card? How inefficient! Your grocer scans your 'special customer' bar code. Medicine is 20 years behind the grocery store!)
If we ever got tough and said no to premium increases, the productivity gains would shortly follow. This happened in the general economy in the early 80s and will have to occur in health care soon, or we'll bankrupt the country.
Kevin Doesn't Get It
It's not really an increase, because the inflation rate isn't really zero. Drug prices are going up at something like 20% a year. Taxes go up. Rents go up. The rice of gas has gone up about 30% over the past six months. Utility bills rise- my garbage bill went up 40% this year, after increasing steadily in past years.
One of the few pleasures of aging is the thought that the young people who hate the elderly will themselves be old eventually- if they are lucky. I'm thinking they may not be so smart to try to teach everyone around them to hate the people they will become.
My son gets $1000 a month in
My son gets $1000 a month in SS Survivor's Benefits because his first mom died when he was a baby. $250 will help a hell of a lot right now. And for the people asking why other taxpayers should foot this bill? It's civilization.
Actually, they have gotten significant benefit increases
"Inflation" is not an operationally defined quantity. So we use the Consumer Price Index to set the version of "inflation" used for SS benefit calculation. But the CPI leans VERY heavily on mortgage payments, and seniors have by and large paid off their houses by the time they retire. It also doesn't account for substitution across categories. The net effect is that "inflation" for seniors is, on average, not what the CPI measures and they get a larger inflation adjustment than is merited by the things they are actually spending money on.
This
and the rising 401k balances should put seniors in a better mood for the 2010 elections.
Did prices drop while I wasn't looking?
Did landlords drop their rent with the deflation? Or banks reduce the mortgage payments? In all likehood, people living in rental housing will get hit with a rent increase regardless of the "deflation." Funny, I missed the part where food prices dropped. There may be no "net" inflation, but I bet most people are still seeing price increases in basic goods (food, shelter).
It really is a scam, isn't it?
Last year energy prices drove the prices up dranmtically on food, clothing, and shelter, and the CPI pegged inflation at a paltry 3.8% because mortgage rates were still low and you could buy or lease a luxury sedan at bargain rates. The CPI is easily and invariably scewed to the lowest possible outcome.
“To turn your back on the corrupt Republican Party and the corrupt Democratic Party---the gold-dust lackeys of the ruling class----counts for something. It counts still more…to join a minority party that has an ideal, that stands for a principle, and fights for a cause.“ Eugene Victor Debs from his 1918 speech at Canton, Ohio for which he was sentenced to 10 years in federal prison in this “the land of the free”.
Wow, all that money!
Really logical, some people complain about the $250 for people on Social Security. The same newletter containing this article has one about how well Wall Street is doing with all the billions of dollars they got. (That's a lot of $250s.) Me, I'm lucky, I have a very high efficient furnace (great in Minnesota). My 85 year old neighbor across the street just paid $1,800 for the oil for her old furnace. We both are on Social Security but I am sure she is a lot worse off than me. Maybe, if instead, they gave her a new furnace, she would be able to make it because that $250 will not make a dent on her oil bill. I eat steak as long as I wait for the day before the package expiration date when the price goes down. I'm ok with that.
Static Social Security
On the disability side benefits work essentially the same, and have been stagnant for 30 years. But it actually goes much further than the monthly benefit. The disregards for earned and unearned income (the amount not counted against benefits for part-time work, gifts, child support, etc. ...) have remained at the 1973 levels also - about $85 monthly. If this were indexed the same as benefits, people could make $407 total monthly. The interesting thing is that if this were the case, their burden on the Social Security Trust Fund (and the General Fund for SSI) becomes cost neutral due to their wage-based contributions to the funds. Side benefit, poverty amongst people with disabilities is ameliorated and we are reintegrated into society.
Social Security increase
So, we get no increase in income but we get an increase in Medicare withholding so we actually get screwed. My wife and I live on Social Security so we will have to cut back on food to make it up
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