For the second year in a row, there will be no cost of living adjustment for Social Security beneficiaries.  We are talking zip, de nada, zilch, nothing.  I have to wonder how many people realize that this is not based on any rational, scientific framework for calculating the actual growth of the economy and real increase in the cost of living.

The truth is that manipulation of inflation measures is done through voodoo economics for the purpose of political expediency.  As Kevin Phillips discussed in Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, the GOP congress, in the mid-1990s, appointed the Boskin Commission under Michael Boskin, former head of George H. W. Bush’s Council of Economic Advisors.  This commission set about to scrap the market basket of goods and services utilized to calculate inflation up to that time and replace it with something that would result in the gradual reduction of Social Security benefits.

On page 82 and 83 of Bad Money, Phillips says the following:

“Social Security payments were not vulnerable to frontal political and legislative attack, so attention shifted to the CPI determination of how much retiree payments would rise each year.  Greenspan and Boskin charged that the CPI overstated inflation by as much as 1.5 percent, and the Boskin Commission recommended a set of revisions to the Bureau of Labor Statistics, which generally concurred.  These changes were implemented between 1997 and 1999, while the public and the politicians were preoccupied by bull market euphoria and the actions in Congress to impeach Bill Clinton.”

It is also worthwhile for readers to check out the website of John Williams, a respected economist, and expert regarding the CPI (  According to Williams, the methodology scrapped and replaced with the Boskin Commission’s recommendation, would have resulted in an official inflation rate of 5 to 7 percent between 2005 and 2007 instead of the BLS determined 2 to 4 percent.

Thanks to the Republicans’ mean-spiritedness and the Democrats’ passivity, cluelessness, and compliance, for the past 20 years, fixed income retirees, workers with COLA clauses in their contracts, and average Americans in general, have been cheated by having their incomes suppressed by the power-elite’s cynical, dishonest manipulation of economic analyses.  Now Democrats are in charge of both houses of Congress and the White House and what do they do right before an election? 

They whack the elderly by increasing deductions for Medicare from Social Security checks while claiming zero inflation.  Brilliant Democrats!  Absolutely brilliant!  Brilliant, that is, if you are trying to lose elections by unjustly and unnecessarily hurting elderly voters a few weeks before an election.

It looks like Democrats are anxious to hand Congress and the Presidency back to the Republicans.  The party in charge of both houses of Congress and the Presidency could force the BLS to make a fair and accurate determination of the inflation rate.  But they choose not to do that. So, to relieve themselves of power, all they have to do is maintain their deluded belief that seniors are stupid enough to believe that the inflation rate is zero while at the same time their health care costs are increasing.


  1. I am not sure that I understand the democrats perception
    on the matter of Social Security. Social Security pumps a lot of money into our economy. Why freeze a legitimate expenditure aka Social Security pay increase that goes back into the economy?

    There are trillions in Social Security that collect interest every day. Nobody talks about this.

    Social Security adds to the deficit. Reality: It’s not just wrong—it’s impossible! By law, Social Security’s funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.

    “Many politicians have repeatedly said that those who put their money in private accounts are “guaranteed” a better return than they’ll receive from the current Social Security system. But every sale of stock on the stock market includes the disclaimer: “the return on this investment is not guaranteed and may be negative”–for good reason.

    During the 20th century, there were several periods lasting more than 10 years where the return on stocks was negative. After the Dow Jones stock index went down by over 75% between 1929 and 1933, the Dow did not return to its 1929 level until 1953. In claiming that the rate of return on a stock investment is guaranteed to be greater than the return on any other asset is lying. If an investment-firm broker made this claim to his clients, he would be arrested and charged with stock fraud. Michael Milken went to jail for several years for making just this type of promise about financial investments.

    Politicians also misrepresent the truth when he claims that Social Security trustees say the system will be “bankrupt” in 2042. Bankruptcy is defined as “the inability to pay ones debts” or, when applied to a business, “shutting down as a result of insolvency.” Nothing the trustees have said or published indicates that Social Security will fold as a result of insolvency.

    Until 1984, the trust fund was “pay-as-you-go,” meaning current benefits were paid using current tax revenues. In 1984, Congress raised payroll taxes to prepare for the retirement of the baby boom generation. As a result, the Social Security trust fund, which holds government bonds as assets, has been growing. When the baby boomers retire, these bonds will be sold to help pay their retirement benefits.

    If the trust fund went to zero, Social Security would simply revert to pay-as-you-go. It would continue to pay benefits using (then-current) tax revenues, and in doing so, it would be able to cover about 70% of promised benefit levels. According to analysis by the Center for Economic and Policy Research, a 70% benefit level then would actually be higher than 2005 benefit levels in constant dollars (because of wage adjustments).

    In other words, retirees would be taking home more in real terms than today’s retirees do. The system won’t be bankrupt in any sense. “

  2. What is AARP doing for us? I think we should send them back our cards and start up another plan that really cares about their citizens. They sold us down the rider with health care and now no increase for the second year. Why don’t they get a petition going or a march?

  3. help i cannot beleive this whole administration! they get raises,but us poor slobs on s.s. get zip. we are all watching & our voices shall be heard.