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My take on this is that every word of the article is true, but what the article did not say is the crux of the matter. This is the basic point of the first reader comment below the article on the AARP website. Yes, the Trust Fund which will carry us 25 (or however many) years consists of I.O.U.'s - special treasury bonds. In order to redeem these bonds over time as the Social Security cash flow goes negative (as it's starting to do now), general tax revenues will be needed, thus placing additional strain on the federal budget. I have no doubt that Social Security benefits will continue to be paid out - I do not see the system being allowed to collapse - for one reason the United States has never defaulted on its sovereign debt. But the AARP article is somewhat misleading, just as the most rabid critics of Social Security are misleading in their doom and gloom statements. I have lost all faith in the AARP's willingness to present any complex reality accurately; they have various agendas.
My take on this is that every word of the article is true, but what the article did not say is the crux of the matter. This is the basic point of the first reader comment below the article on the AARP website. Yes, the Trust Fund which will carry us 25 (or however many) years consists of I.O.U.'s - special treasury bonds. In order to redeem these bonds over time as the Social Security cash flow goes negative (as it's starting to do now), general tax revenues will be needed, thus placing additional strain on the federal budget. I have no doubt that Social Security benefits will continue to be paid out - I do not see the system being allowed to collapse - for one reason the United States has never defaulted on its sovereign debt. But the AARP article is somewhat misleading, just as the most rabid critics of Social Security are misleading in their doom and gloom statements. I have lost all faith in the AARP's willingness to present any complex reality accurately; they have various agendas.
The articles does not agree with the report of the SS trustees.They gave a estimated date and said that SS payments would be estimated 70% of noraml across the board by the law.They also agve dates on which the IOU payments are due which will not save it . To me it sounds like the Democrats line when the SS trustees warned Clinotn and Bush as required by law and wil in Feb 2012 warn Obama. When Bush was warned the democrats i congress voted to do nothing saying it was safe from failure;after the Breaux(D) hearings that concluded that the only way to save it was huge increaes in payroll tax or reductions or combination of both.
Umm....NO! Cola has been suspended for the time being due to the economic downturn.
Umm....YES! While there has been no Cost of Living Adjustment for two years now, it has not been suspended in the sense that a decision was made to suspend it. There has not been one because the calculation of the cost of living, as defined, has not shown an increase. When that calculation shows an increase, there will be a COLA. That is, the "decision" does not depend on anyone's judgment, but is a mathematical one as determined by law enacted quite a long time ago. You may recall that there was a large Social Security COLA in 2009. So while we can quibble about whether the legally mandated forumlas are an accurate representation of the average retiree's cost of living, my statement remains accurate in a broad sense: Social Security retirement benefits are inflation protected by COLA's determined on an annual basis.
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