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Published: August 24, 2009
The millions of Americans who receive social
security will not see their payments rise next year and probably
not the year after. The cost of living
increases that
have been in place for 30 years are being undermined by the
lack of inflation.
Government numbers show that about 50 million citizens get
payments from the Social Security fund.
Those who get Social Security payments may find that the lack
of a “pay raise” hurts them because many of their costs are
rising. Those could be energy expenses, medicine or food costs.
The lack of overall inflation does not mean that none of the
average American's expenses are rising. On the contrary, energy
prices are increasing rapidly now, particularly for people who
drive or use home heating oil.
The lack of an increase in Social
Security benefits will also hurt
consumer spending. Recipients who
are not getting more money each
month are unlikely to have much, if
any, disposable income. These people
can be added to the unemployed and
under-employed as groups that will
keep whatever tiny sums of money
that they have in their pockets.
The stimulus package still has as
its stated goal that it will add or
save 3 million to 3.5 million jobs.
It does not appear to be aiming any
of its efforts toward keeping living
wages or benefits at levels that
allow people to remain part of the
consuming population. As the number
of people who can spend money beyond
essential living costs decreases, so
does the chance of improvements in
consumer spending, which makes up
70% of GDP.
Flat Social Security payments may
help save a fund that is quickly
disappearing, but they also hurt the
economy when the economy cannot
afford to be hurt.
-- Douglas A. McIntyre
Editor
247WallSt.com |
