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To: Wuli
Outstanding post.

One thing you didn't mention is an additional strategy for covering future Social Security shortfalls -- and this is one that I've speculated will be the most successful simply because it will not be easily detected.

The Federal government will simply (if it hasn't already started) engage in a deliberate process of under-estimating the inflation rate, thereby reducing future SS liabilities to a growth rate that is somewhat less than the growth in overall wages, prices, etc. By the time 2042 rolls around, I suspect the average monthly Social Security check will be barely enough to cover three weeks' worth of dog food.

56 posted on 03/10/2005 6:02:11 PM PST by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: Alberta's Child

Right now the COLA (cost of living increase) for Social Security is calculated based on the inflation rate for wages, not prices. Inflation has been so low that the COLA has been higher than the rate at which prices have gone up. Besides, if your retired, the importance of a COLA is to keep up with prices, not the working guys wages.

One of the suggestions is to use a price based COLA for Social Security. Some long range projections I seem to remember look like 25% lower benefits, than now projected, after 2030, for the higher level beneficiaries.

Unfortunately, I have never yet seen a combination of proposals that eliminates the need for some use of general revenue taxes for some portion of the Social Security shortfall.


61 posted on 03/10/2005 6:20:08 PM PST by Wuli (I have some thoughts and questions about social security.)
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