Oct 22, 2007
The U.S. government announced that payments to Social Security recipients and most federal retirees will increase only 2.3% in January, the smallest cost-of-living adjustment since 2003. This will increase the average retirement benefit by $24 to $1,079.
This ludicrously small increase is based on the rise in the government’s consumer price index, that is, the official measure of inflation. Of course, in the real world, this kind of increase doesn’t begin to compensate for how much prices are really rising for everything from medical care, housing, electricity, transportation, food, and education. For example, the average retail price of a gallon of milk has never been higher – $3.80 per gallon – up 51 cents since February. And in Georgia its price approaches $5 a gallon.
By deliberately underestimating the inflation rate, the government saves a lot of money. It pays out less in cost-of-living adjustments to the 31 million Social Security retirees, the 11 million people who receive disability or other supplemental income from the Social Security Administration and the 4 million federal government and military retirees. This frees up still more money for government officials to funnel to the big corporations in the form of subsidies and tax breaks.
Besides that, both corporations and government agencies also use official lies about the supposedly lower inflation rate as an excuse to pay lower wages, thus allowing the real inflation rate to silently and relentlessly eat away at ordinary peoples’ real living standards.
As the old saying goes: “inflation is the cruelest tax.” And the government has imposed it on those least able to pay – people living on Social Security.