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Obama has spend sooo much money, how do you expect a decent cost of living wage on Social Security. It's a shame. We have been delt a terrifying hand from this man in more ways than one.
No sitting President, short of changing the Social Security Act, has anything to do with determining annual SS COLA's. The COLA is determined from data compiled by The Bureau of Labor Statistics. It's strictly mathematical.
The personnel involved in compiling CPI data, are career civil servants. I would venture to say that the numbers that are spit out, come out of a computer, with minimal human interaction.
Suggesting that COLA's are politically manipulated, falls under the category of conspiracy theories.
No sitting President, short of changing the Social Security Act, has anything to do with determining annual SS COLA's. The COLA is determined from data compiled by The Bureau of Labor Statistics. It's strictly mathematical.
The personnel involved in compiling CPI data, are career civil servants. I would venture to say that the numbers that are spit out, come out of a computer, with minimal human interaction.
Suggesting that COLA's are politically manipulated, falls under the category of conspiracy theories.
I wonder if people realize that the size of their SS is a snapshot based on up to 35 years of their life or their spouses and not the last four years. I sometimes wonder if people are realizing the statements they are making about their own personal finances in here. Someone can help clarify but isn't the cost of living adjustment paid by the SS trust fund and not the general revenue fund?
its changed from time to time to try to make it more accurate to reflect changing lifestyles. there is also alot of myth that floats around too.
there is no such things as if steak gets to expensive let them eat hamburger as you hear so ofton.
when home prices were soaring and not everyone was an owner it was changed to a formula that has everyone renting.
its human nature that when something gets to expensive most people stop buying it or switch products.
thats what the cpi does, it switches to try to predict human nature. of course it will be accused of cooking the books but thats just what people do, they shy away from the product.
its no different then the dow industrial index.
when a company faulters or no longer represents what its supposed to its booted out.
the index is supposed to represent the best of breed in certain sectors and when it doesnt out it goes. the index isnt being manipulated in a fraudulent sense,its being changed to better reflect what its supposed to.'
it could be said that the dow would be a fraction of what it is if the faultering companies werent booted out. thats very true but thats not what the index is supposed to represent. its supposed to represent an index of the best of breed in that sector .
no index of that size will ever be dead on and no index will ever reflect your cost of living which is a different formula all together.
cost of living takes into consideration not only the price changes but how much does that item represent in your budget and how many times do you actually buy it as well as a factor for quality of that item.
we save save big bucks shopping at k-mart vs lord and taylor but we may be buying an inferior product.
how do you compare a 1974 monte carlo in price to a 2012 monte carlo. for all purposes its not even the same car.
cost of living and our own personal rate of inflation are something different from just the cpi.
i have seen countless websites each with their own spin right or wrong trying to show a big cover up and quite frankley most arent worth the time reading their postings. like statistics they can show anything like out of context.
see if the answers to some of the objections about the index sound plausable to you. to me most of the answers do make sense for the changes or why and how they measure things.
Someone can help clarify but isn't the cost of living adjustment paid by the SS trust fund and not the general revenue fund?
Everything is paid by Social Security. In theory, it should be paid out of FICA/SECA revenues collected, but the FICA/SECA tax rate is way too low, as is the number of people working, so SSA isn't able to collect sufficient revenues so it actually is coming out of the OASDI Trust Fund(s).
You took a serious hit 3rd Quarter. You had both a decline in GDP and a decline in Payroll, that, in conjunction with other factors (such as declining manufacturing) can signal movement toward a recession.
Note that declining GDP does not automatically result in lower payrolls.
For example, 2nd Quarter GDP declined, but payrolls rose and SSA pulled in an additional $11 Billion in FICA/SECA taxes (and Medicare proportionally saw an increase as well).
However, 3rd Quarter GDP declined and payroll dropped as well -- big time -- from $197.7 Billion to $169.3 Billion -- a loss of $28.4 Billion.
So your $11 Billion gain in FICA/SECA 2nd Quarter was totally wiped out, plus you lost another $17 Billion (and the same holds for Medicare proportionally).
As it stands, you have two months to crap $133 Billion in FICA/SECA taxes and that just ain't gonna happen, so best case scenario is you finish the year $35 Billion to $40 Billion short on 2012 projections.
You were at $2.74 TRILLION in the OASDI Trust Fund in June, but by August you were down to $2.72 TRILLION. They haven't reported September's Fund numbers yet.
I wouldn't panic just yet. The earliest you'd enter another recession based on the data now would be 2nd/3rd Quarter of 2013.
It's possible Medicare Part B is paid out of the General Fund. I'd have to check on that. Part A is paid out of the HI Trust Fund, but Medicare Part B and Part D are in the SMI Trust Fund which is in theory supposed to be self-funding since it's paid through voluntary premiums (for those who want Part B and Part D). According to the Medicare Trustees, the SMI Trust Fund is balanced through the next 10 years (if not through the Infinite Horizon).
Clarifying...
Mircea
Quote:
Originally Posted by Happy in Wyoming
The consumer price index is manipulated. If it's a conspiracy it's not a theory; it's a fact.
According to BLS, the cost of electricity decreased 1.5% in September.
Do you know anyone who has experienced an electric utility rate decrease?
Wondering....
Everything is paid by Social Security. In theory, it should be paid out of FICA/SECA revenues collected, but the FICA/SECA tax rate is way too low, as is the number of people working, so SSA isn't able to collect sufficient revenues so it actually is coming out of the OASDI Trust Fund(s).
It's possible Medicare Part B is paid out of the General Fund. I'd have to check on that. Part A is paid out of the HI Trust Fund, but Medicare Part B and Part D are in the SMI Trust Fund which is in theory supposed to be self-funding since it's paid through voluntary premiums (for those who want Part B and Part D). According to the Medicare Trustees, the SMI Trust Fund is balanced through the next 10 years (if not through the Infinite Horizon).
Second bolding first: Medicare Part B is paid for (by law) 25% by the premiums charged and 75% by general tax revenues.
Next, where Soc. Sec. benefits come from. Your statement is correct, as usual. However, in terms of the actual cash flow, we can make a clarification. The OASDI Trust Fund consists of special Treasury bonds which can be redeemed only to the benefit of Social Security. But to redeem them, general tax revenue is required.
That may be a bit confusing, but consider the history. All those years when FICA tax revenue exceeded benefit payment outgo, the surplus was put into the Trust Fund as I.O.U.s in the form of those special Treasury bonds, with the funds actually going into the general federal budget, thus partially masking the actual level of the budget deficits. Now that Soc. Sec. cash flow has turned negative, it's time to pay back and that will be a continuing strain on the general fund. So that whole "lock box" rhetoric was essentially misleading even if technically correct.
actually the electricity costs are measured against constant dollars so you could have gone up but when adjusted for constant dollars you may actually be down.
as an example how would you account for the fact your electric bill stayed the same yet in dollars inflation was 5% higher? in dollar terms its acually down if you think about it.
many areas have a fuel charge mulitplier on their electric bill. if thats lower your overall bill may be lower but you dont notice it because your usage always varies so unless you pull out your own bills and compare actual charges vs charges you wouldnt even know you may not be paying as much..
many areas use demand meters and multipliers too. they record your highest peaks and hit your overall bill with a multiplier based on the fact that for those seconds they had to have equipment and generators turning ready to provide that much power for that instant whether you use it all day at that level or not.
the fact your refrigerator kicked on at the same time the ac unit kicked on and created an untypical spike can totally over shadow the fact your bill actually didnt go up but this fluke in start ups actually is raising your bill ..
Last edited by mathjak107; 10-17-2012 at 04:02 AM..
as a side thought i was thinking of our 2nd home e just sold in pa.
PPL the utility had made a deal with the state of pa when they built their hydro-elecric plant not to raise rates for 10 years .
well in the 11th year we got a whopping 30% increase.
so how should a cpi index deal with that? it cant unless all the years before using constant dollars it was recording it as a negative increase because we didnt go up with inflation.
yet many folks like us didnt get to take advantage of those 10 years because we didnt even live there .
all we see is a 30% increase.
this is why the index is so complex and may not show what you feel.
Obama has spend sooo much money, how do you expect a decent cost of living wage on Social Security. It's a shame. We have been delt a terrifying hand from this man in more ways than one.
Sure, let's blame the President for everything; How about the inaction of the Congress? The debt is due in part to two wars which he did not get us into. The debt is also due in part to extended unemployment benefits and other programs, which helped keep food on the table for many Americans during the Great Recession, which he walked into.
I'm not saying he is perfect or that he couldn't have done a better job, but he was "delt a terrifying hand" and had to deal with the worst financial situation since the Great Depression; so you can't blame him for everything.
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