Social Security Payments To Shrink For The Next Two Years
Well, not shrink but rather they won’t be adjusted for inflation. Which amounts to the same thing. Oh, and Medicare prescription drug premiums will be going up. So, you know, hope and change.
Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise.
The trustees who oversee Social Security are projecting there won’t be a cost of living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975.
By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
“I will promise you, they count on that COLA,” said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. “To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal.”
Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.
Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income.
“For many elderly, they don’t feel that inflation is low because their expenses are still going up,” said David Certner, legislative policy director for AARP. “Anyone who has savings and investments has seen some serious losses.”
About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.
Anyone else thinking that this might not be happening if the Democrats hadn’t stonewalled Social Security reform under President Bush?
Regardless, I think this illustrates perfectly how foolish it is to make yourself dependent on the government with things like Social Security, Medicare, etc. Because once you’re dependent on the government, the government can screw you and there’s really not anything you can do about it.
The awful thing is that Social Security and Medicare aren’t optional. We are all forced to pay into these badly-managed programs and most of us will never, ever get out of the programs the same amount of money we’ve paid in. Let alone any sort of return on investment. Though I’d hardly call mandated payments into a government-run ponzi scheme “investment.”
Rather than plugging everyone into the country, including many who have no need of programs like Social Security and Medicare, into gigantic government programs why not let people keep their own money and empower them to save for their own retirements? And save the government programs for providing for people who legitimately cannot provide for themselves?
That probably makes too much sense. After all, how can you get the old people to vote for you if you don’t control their retirement and health care?
