Millions of Social Security recipients and disabled veterans will receive the smallest benefits increase since 1975, when automatic increases were adopted to offer a shield against price inflation, according to an analysis by The Associated Press.
The benefits will increase by roughly 1.5 percent, against price inflation of almost 10%, when measured using more forthright methods employed by the Federal Government itself, until 1980.
However, consumer prices, when measured according to
dubious modern methods might enable Federal Government to justify the meager raises next year.
The precise extent of the cost-of-living-adjustment (COLA) will be determined using inflation data released by the US Labor Department. In the midst of all the uncertainty surrounding the government shutdown, both parties and White House are quarreling over entitlements and debt, while almost 58 million Social Security recipients have been left in limbo.
With real inflation almost crossing the 10% threshold, prices are doubling every 7 years, and disabled veterans, children, women and seniors are staring at grinding poverty. If government raises these benefits by 1.5%, the typical monthly payment would rise by $17, equivalent to two Chinese take-out dinners, on an average monthly check (or direct deposit) of $1,162.
The COLA increases since 1975 have averaged 4.1% per annum, but never managed to keep up with real inflation. Millions of seniors on fixed incomes are feeling robbed and helpless in the face of Federal Reserve’s power to inflate ad infinitum. Among those hardest hit are 3 million disabled veterans and at least 8 million poor dependent on Supplemental Security Income.
“I’m not one of those folks that’s going to fall into poverty, but it is going to make a difference in my standard of living as time goes by…I live in a small apartment and I have an old car, and it’s going to break down. And no doubt when it does, I’ll have to fix it or get a new one,” said David Waugh, a retiree from Maryland.
In the aftermath of 2008 financial crisis, there was no COLA in 2010 and 2011, since the government deemed price inflation to be too low.
Remarkably, despite the misery wrought on the seniors, AARP estimates the COLA to be between 1.5-1.7%, in agreement with government claims.
Efforts to privatize Social Security have been drummed out of all public debate, despite the phenomenal success of the Galveston Plan, named after Galveston County of Texas. The Galveston Plan was enacted after county employees withdrew from Federal Social Security system, and invested their retirement funds into private accounts managed by the conservative First Financial Benefits, the company that manages the accounts.
Despite the central role of inflation in determining the purchasing power of dollar, it has never attracted the vigorous national (and international) debate it deserves. And that is the slow motion tragedy unfolding in America, with every passing day.
[image from wikipedia]