Deflation Means No COLA for Seniors
October 15, 2009 by Patrick Watson
Filed under Commentary, Economics, Regulation & Legislation, Scams & Ripoffs
Sorry, senior citizens: there will be no cost-of-living adjustment in your Social Security payments this year. You are victims of deflation.
Today the Labor Department reported that the Consumer Price Index rose 0.2% in September and fell -1.3% in the last twelve months. This was no great surprise, since it was the seventh consecutive month of negative year-over-year CPI. September is a special month, however, because it is the end of the federal government’s fiscal year and is used to determine inflation adjustments for the next year.
By law, Social Security payments cannot go down – but they don’t have to go up, and this year they won’t. This may come as a surprise to retirees who have grown accustomed to getting a “raise” each year. The last year without a COLA was 1975.
Even more aggravating, health care was one of the few CPI categories to actually go up in the last year while much of the decline was related to energy costs. Retired people, of course, are often above-average consumers of health care and below-average consumers of energy. Their cost of living hasn’t dropped, negative CPI notwithstanding.
President Obama and members of Congress are keenly aware that senior citizens won’t like this development at all. They are therefore seeking to defuse the political explosive environment with a one-time $250 payment to all Social Security recipients. This would be in addition to the $250 “economic stimulus” payments sent to the same group earlier this year.
These payments will largely offset the lack of a Social Security COLA this year, and some seniors may actually come out ahead. Nonetheless, at least one lobbying group is already whining that it’s not enough. The younger workers who pay the bills are, apparently, not their concern.
“Victims of deflation” is a bit melodramatic. They are the beneficiaries of deflation. Their dollars go further. Natural gas is cheaper. Electricity is cheaper. Gasoline is cheaper. Travel is cheaper. I see a lot of eldery people driving around massive campers worth $100,000 and taking a lot of vacations. Doesn’t sound like the poverty class to me.
The young and the youthful are the victims of the eldery. It is our wages and sweat equity funding the black hole of medicare and social security. Not only are their no raises for us, there are no jobs, no pensions, and no social security. The fixed-income crowd cries a good game, but fixed income is a magnitude better than NO income.
well if not for us seniors , you punks would be talking japanese ,and eatin rice balls , we worked for our entire lives for a pension that was stolen from us by those who call themselves politicians , its these people who have run rampant with this program and that pork spending pet project like (ONE WORLD, ONE GOVERNMENT? RIGHT OUT OF OBAMA HISELF A SHAMEFULL STATEMENT one to be proud of , he want to rule the world or try to with your children , its started in schools already called propaganda truth full lies they believe in he was picked by a few for president votes really didnt matter they saw it all on the wall in his little subtle way of saying call me ruler leader king i for one will not