Tuesday, October 12, 2010

The Freeze is Official

It appears that the guidance given a few weeks ago has become official. For the second year in a row, there is to be no increase in the monthly sums paid to recipients of Social Security. The reason that there is no increase is because the Consumer Price Index (CPI) tracks with overall inflation. For the past two years, inflation has been negative, in part due to machinations by the Federal Reserve to prevent stagflation. As a consequence, the monthly payments to seniors remain at the current average rate of $1072.

Unfortunately for seniors, the prices of everything else have not stayed static. Even ignoring luxury items, essentials such as utility payments, food costs, transportation costs and insurance premiums have continued to rise. In effect, when costs increase at a rate that is higher than income, what results is a salary decrease, and this effect could imperil the already tenuous existence of many elderly Americans. Seniors are not the only ones experiencing this effect as salaries are frozen for those lucky enough to have jobs, while the cost of health insurance (and everything else) rises.

The timing of this "decrease" is significant as well. With midterm elections occurring in less than one month, and discontent on the rise, it would not be surprising to see senior citizens turning out in greater than average numbers to express their displeasure at the ballot box. Whether either party can solve the problem of an eroding tax base (due to unemployment and a lack of available funds for lending), and an endangerment of government programs remains to be seen.

For assistance with your Social Security Disability claim, contact attorney Thomas O'Brien at Feiler & Associates.

1 comment:

  1. Luckily there was a COLA increase for 2012. 3.6% I believe