'Tinkering With The Social Security Inflation Adjustment'

from themoderatevoice..........

"Since 1975, benefits of Social Security recipients have been adjusted for inflation every year. Last year Washington found a cute way to stiff recipients out of this cost of living adjustment (COLA). Now both parties there are working on a plan to ensure that older Americans get a smaller adjustment every year into the future.
The chosen mechanism to ensure this is something called the “chained consumer price index,” which may soon replace the traditional Consumer Price Index (CPI) measure for computing benefit inflation adjustments. The chained CPI does this by making an assumption, unprovable but probably correct, that consumers shop for cheaper products when times get tough. In doing so they spend less for similar goods so their personal inflation is less. This, in turn, means a smaller annual inflation benefit increase is appropriate.
It’s an interesting theory. But here’s some real world facts about inflation that Washington policy makers conspicuously choose to ignore. Though medical co-pays are soaring, they are not computed when figuring the CPI, and hence don’t get added in to present inflation adjustments forSocial Security recipients. New fees (over formal charges) from banks, airlines and other businesses are soaring, too, but they don’t get figured in. The extra costs of paying for government services that are no longer covered by taxes are not figured in either.
In other words, real world inflation is a lot higher than the CPI on which Social Security inflation adjustments are presently based, and more than offset so-called “chained” inflation reductions"..............................READ MORE