Sorry, I Must Predict a Grim Outlook for Social Security Recipients

Sorry, I Must Predict a Grim Outlook for Social Security Recipients

It appears very likely that there will be a return of inflation and those people on Social Security will feel the effects the most. On the bright side, 2012 should mark the return of the COLA with a 5% or more increase in SS benefits

I'm not quite sure where the government gets its information when it comes to inflation and the cost of living, but for the 1 in 7 Americans that receive some form of benefits from Social Security. It only matters that they said the cost of living remained the same and there would be no increase in their monthly check. Can you imagine a Congressman or another Federal worker not getting a raise for 2 years? Over 50 million Americans depend on the government check either as their sole means of support or as a supplement to another source of income.

Social Security benefits have been frozen at 2009 levels. There was no Cost of Living Allowance (COLA) in 2010 and there will be no COLA in 2011. This is really quite unusual since a 1972 law made the COLA mandatory each year, starting in 1975. Just about every year, there was at least a modest increase in pay, usually averaging 2%-4%. In 1980, with inflation rampant, Social Security benefits were increased 14.3%. The next year, the COLA was 11.2%.

With no increase for the last 2 years, the government is saying that prices did not go up and everyone is doing as well today as they were doing in 2009. Anyone that depends on Social Security just to get by knows that it has become more and more difficult to keep up with the cost of living. In the past 2 years, the price of gasoline has increased by well over a dollar per gallon. Food, especially basic commodities like fruit, vegetables, meat and milk have skyrocketed. Medical costs for both services and prescription drugs continue to rise. At the same time that prices for necessary goods and services were rising, the value of homes was falling.

Does anybody care that the elderly and disabled are getting squeezed from both sides? Social Security eligibility used to be something to look forward to. It was kind of a reward for years of working long and hard hours. Today, Social Security eligibility means it is time to cut back on the lifestyle you had been living.

With so many Baby Boomers reaching the age when their Social Security eligibility kicks in, there will be even more pressure on the US government to cut back on paying Social Security benefits. As anyone who has observed the behavior of our government will concede, cuts in Social Security benefits are just around the corner.

Since Social Security began in 1937 through 2009, Social Security has paid out $11.3 trillion and taken in FICA payments of $13.8 trillion. There is a $2.5 trillion surplus in the Trust Fund. There is more than enough money to pay current beneficiaries for the rest of their lives.

Gasoline prices will rise above $4.00 in 2011 and inflation will rear its ugly head. It will be a burden on everyone, but, the government will pay out a substantial Cost of Living Allowance of at least 5%. Unfortunately, our National Debt will continue to increase and we will slip further down the ladder in our standard of living.

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