Where is the US economy headed?

@roger,

Can't disagree with that!

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From CBS news:

Quote:

Millions of older people will 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....

http://www.cbsnews.com/stories/2009/08/23/national/main5260253.shtml?tag=cbsContent;cbsCarousel

If this happened during the Bush administration, he would be villified from one end of the country to the other, and all sorts of motives would be ascribed to him regardless of his level of involvement in the process. It's a double standard.

1 Reply

@Brandon9000,

I don't think it is a double standard, Brandon. It is the law.
Thank you for posting the link to the CBS story.
CBS notes that SSAE benefits can not go down. They stay the same, or go up if there is inflation in our economy. Last year, benefits went up 5.8% due to the spike in oil prices ($140 or so a barrel). This is the Cost of Living Adjustment (COLA).
This year, we have negative inflation (mostly due to oil prices dropping by about 50%). That means that there will likely be no COLA.
The notion of SSAE benefits being cut, as you seem to suggest, comes from the prescription drug premium going from $28 to $30 a month. That extra $2 will reduce the SSAE payments for lots of folks.
I have no disagreement with you that the cost of being old has little to do with the price of oil. It has to do more with things like food.
The SSAE COLA increase, by the way, comes out at the end of Oct. There will be a lot of unhappy retirees. No 5.8% increase this year.
Retirees, perhaps, need to see price inflation.

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@realjohnboy,

Inflation is a two-edge sword though. Inflation is followed by interest rate rise which is negative pressure on the stock market. And inflation invariably finds its way to bread and hamburger which is tough on those making it on minimal funds.

Any way you cut it, if you are receiving about half the maximum social security benefit or less, which is the norm for most Americans, trying to live on social security is tough. And if you supplement social security with savings eroding due to inflation or incurring a bear market, and that as often as not is exacerbated by increasing costs of home maintenance, utilities, etc. coupled with declining home values, the picture is no less grim.

But even in good times we can't continue a system indefinitely in which the group of recipients continues to increase while the group of those paying into the system continues to proportionately decrease. We should begin now to slowly, carefully, and in tiny increments begin to privatize the entire system as much as possible.

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@Foxfyre,

My quip about retirees "wanting" inflation was merely that: a quip. We -I - got a 5.8% "raise" last year. This year I expect nothing. Inflation is not good.
The SS system is, I agree, not sustainable. There are too few workers paying in enough to support those of us who have or will soon be retiring. And we aren't planning on dying anytime soon. We will be around for longer than any earlier generation.
You talk about SS reform, perhaps privatization. Fine. But the current health care debate could drag on to the point that Congress will decide to punt the issue away until after the next mid-term election.
Is that not a model for how SS restructuring will be handled? Talk and talk about the need for reform, but then punt, claiming more study is needed?

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COLA increases (therefore, SSAE increases) for a few selected years:
2008: 5.8%
2007: 2.3%
2005: 4.1%
2002: 1.4%
1990: 5.4%
1986: 1.3%
1982: 7.4%
1980: 14.3%

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@realjohnboy,

realjohnboy wrote:

My quip about retirees "wanting" inflation was merely that: a quip. We -I - got a 5.8% "raise" last year. This year I expect nothing. Inflation is not good.
The SS system is, I agree, not sustainable. There are too few workers paying in enough to support those of us who have or will soon be retiring. And we aren't planning on dying anytime soon. We will be around for longer than any earlier generation.
You talk about SS reform, perhaps privatization. Fine. But the current health care debate could drag on to the point that Congress will decide to punt the issue away until after the next mid-term election.
Is that not a model for how SS restructuring will be handled? Talk and talk about the need for reform, but then punt, claiming more study is needed?

Both are hot potatoes--I always wonder if I've graduated from the Dan Quayle School of Spelling every time I write potatoes--and unfortunately we tend to elect political wimps who usually don't pick a hot potato issue as the hill to die on.

But honestly, I have come to believe it far better for the government to do nothing at all than do something with little more than hope that it will not blow up on them before the next election. I wish the government would do nothing at all than do the wrong thing. And that's how I'm looking at healthcare. I think it is apparent to all but the most clueless that neither Obama nor Congress has a clue what they are doing.

Nobody wants reforms of the system more than I do. But I want reform that will absolutely positively work or at least not make a bad situation worse. But relaxing regulations, tort reform, and allowing more flexibility in what is and is not covered aren't even on the table for discussion, much less part of the current proposed plans. The idea that the government will butt out of it except perhaps to honor existing constracts and offer a catastrophic health insurance policy--something like government flood insurance--to help people afford to avoid devastating costs has not even been suggested. That would be far less costly than anything that has been proposed so far.

Until they get serious about really focusing on the problems with healthcare instead of focusing on how they will control the system, I hope they don't get anything passed.

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@realjohnboy,

realjohnboy wrote:

My quip about retirees "wanting" inflation was merely that: a quip. We -I - got a 5.8% "raise" last year.

That 5.8% was darn near a windfall, actually. Indeed, it was largely caused by the affects of gasoline at $4.00 +, but by the time the raise became effective, the costs of motor fuels had more or less crashed. Also, inspite of the increase in benefits, there was no corrosponding increase in Medicare premium.

This year, no increase for inflation, but if we get into a deflationary period, there can be no cut in benefits. This is not a bad situation, at least for those receiving SS checks.

I am a bit leery of the increase in Medicare deductions for those above a certain level of income. The introduction of two tier pricing based on income (based on need, in other words) sneaks in the concept of welfare, as opposed to what I like to consider to be insurance. Veterans Administration seems to have come up with the same philosophy, by the way. Instead of medical care as some sort of compensation for long, underpaid, and sometimes involuntary service, the income and asset testing seems to make it into some sort of welfare program - just not for everyone.

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@realjohnboy,

realjohnboy wrote:

I don't think it is a double standard, Brandon. It is the law.
Thank you for posting the link to the CBS story.
CBS notes that SSAE benefits can not go down. They stay the same, or go up if there is inflation in our economy. Last year, benefits went up 5.8% due to the spike in oil prices ($140 or so a barrel). This is the Cost of Living Adjustment (COLA).
This year, we have negative inflation (mostly due to oil prices dropping by about 50%). That means that there will likely be no COLA.
The notion of SSAE benefits being cut, as you seem to suggest, comes from the prescription drug premium going from $28 to $30 a month. That extra $2 will reduce the SSAE payments for lots of folks.
I have no disagreement with you that the cost of being old has little to do with the price of oil. It has to do more with things like food.
The SSAE COLA increase, by the way, comes out at the end of Oct. There will be a lot of unhappy retirees. No 5.8% increase this year.
Retirees, perhaps, need to see price inflation.

Nonetheless, if this exact same thing had occurred under Bush's presidency, he would be vilified for it.

1 Reply

@Brandon9000,

Brandon9000 wrote:

Nonetheless, if this exact same thing had occurred under Bush's presidency, he would be vilified for it.

What "exact same thing" are you referring to?

1 Reply

I've got to admit I don't understand prescription drug coverage going from $28 to $30 per month. Is this Medicare Part D? I looked at dozens of plans, and picked one that is $14.50/month. That's high deductable with a fairly reasonable co-pay. There are many other options, and every one of them is voluntary.

If anyone is interested, if you get all your prescriptions from Walgreen's, they can run a printout of your annual costs under all the plans available in your area, and the first 5 are ranked by cost.

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@roger,

And I must concede that I have no idea what I am talking about regarding how different prescription drug programs work...and might or might not affect SS benefits. I was relying on Brandon's link to the CBS story.
That is all I know. I have not ever in my adult life had the need to have a prescription! Knock on wood.

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@realjohnboy,

I know. I checked out the link (something I rarely do) and that's exactly what it said. It was a puzzling comment.

By the way, the plan I finally went with saves me almost nothing. That is my concept of insurance, though. If a plan pays for everything, it is likely to cost as much as the prescriptions, plus a bit for administration. Well, I think there is some government subsidy involved, but never had any numbers on that subject. The plans are all private insurance companies, but. . . .

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@realjohnboy,

realjohnboy wrote:

Brandon9000 wrote:

Nonetheless, if this exact same thing had occurred under Bush's presidency, he would be vilified for it.

What "exact same thing" are you referring to?

Something that could in the wildest stretch of anyone's imagination be referred to as a decrease in social security. If that had happened under Bush, the accusation would be made that he was indifferent to the plot of the elderly and only wanted to help fat cat businessmen. Now, how many times am I going to have to explain something quite simple?

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@Brandon9000,

I don't think you need to explain that you are "simple" Brandon.

SS is tied to inflation. Anyone that accused Bush of being indifferent to the "plot"? of the elderly while ignoring the fact that SS is set by law would be "simple" as well.

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@Brandon9000,

Brandon9000 wrote:

realjohnboy wrote:

Brandon9000 wrote:

Nonetheless, if this exact same thing had occurred under Bush's presidency, he would be vilified for it.

What "exact same thing" are you referring to?

Something that could in the wildest stretch of anyone's imagination be referred to as a decrease in social security. If that had happened under Bush, the accusation would be made that he was indifferent to the plot of the elderly and only wanted to help fat cat businessmen. Now, how many times am I going to have to explain something quite simple?

It's simple Brandon but you are using too big words to explain it. Let's simplify it a bit more:

1. Social Security checks will be smaller under the first Obama administration and his admirers defend that as following the law.

2. If Social Security checks had been smaller under the first or second Bush administrations, his enemies would have accused him of not caring about the elderly and/or caring about special interests or favored cronies or whatever more than the elderly, etc. and they would have derided or shouted down any who attempted to point out that this was simply following the law.

This is a double standard that is incomprehensible to many on the Left and therefore will be neither acknowledged nor admitted.

1 Reply

@Foxfyre,

Foxfyre wrote:

This is a double standard that is incomprehensible to many on the Left and therefore will be neither acknowledged nor admitted.

I certainly wouldn't have accused Bush of 'not caring about the elderly,' if there was no COLA raise in SS one year due to bad recession. It doesn't really make sense.

Cycloptichorn

1 Reply

@Cycloptichorn,

Well good for you. That's at least one thing you wouldn't blame Bush for.

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@Foxfyre,

Foxfyre wrote:

Well good for you. That's at least one thing you wouldn't blame Bush for.

Not everything that he did was bad or wrong; sometimes, he screwed up and did something good by mistake. Laughing

Cycloptichorn

1 Reply

@Cycloptichorn,

They just gave out on the BBC News (second item) that the US national debt stands at $9 trillion. And rising.

I make that about $30,000 each and when you consider how many kids there are and OAPs and sick and unemployed and also that the demand side is getting bigger it is hard not to feel sorry for the supply siders.

1 Reply

Where is the US economy headed?

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