October 15, 2009

THE UN-COLA:

Stagnant Prices Prevent Social Security Increase (Amy Goldstein and Neil Irwin, 10/14/09, Washington Post)

An increase in benefit checks each January has been a yearly ritual since the mid-1970s, when the government moved to ensure that its subsidies to retirees, pension recipients and others who receive Social Security benefits kept pace with inflation. Thursday's announcement by the Labor Department will mark the first time that the federal formula used since then, which is tied to the consumer price index, will translate into no increase at all. That is because consumer prices have remained stagnant in the weak economy -- a sharp reversal from this past year, when Social Security checks grew by 5.8 percent, an unusually large amount.

When inflation was also non-existent.

Posted by Orrin Judd at October 15, 2009 5:51 AM
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