Two little blurbs from Marketwatch tell the story of our country today. In case you haven’t noticed, we’re an aging country. Over 15% of the US population is over 65 years old, collecting Social Security. That is approximately 50 million people. Another 10,000 people per day turn 65. Thanks to Alan Greenspan’s bullshit adjustments to the CPI and the apparatchiks at the BLS weighting the index in a ridiculously false manner, senior citizens are getting screwed and have been getting screwed for years.
Your government has the balls to tell your grandma and grandpa they have no inflation, therefore they don’t need an increase in their pitifully small Social Security check. The CPI is a joke. Not only did plunging gasoline prices drive it lower, but the fake owners equivalent rent calculation doesn’t capture the massive surge in home prices. It drastically under weights the cost of health insurance, and purposely under reports the increases in food costs.
Senior citizens don’t drive much, so lower gasoline costs don’t reduce their expenses much. Many live in apartments and rent is likely one of their largest costs. Rent has been going up at 4% to 5% per year, and landlords plan on increasing rents by 8% next year. Food prices will rise. Energy costs are near decade lows, so in all likelihood will rise. We already know the impact of Obamacare. Health related costs are skyrocketing. Senior citizens tend to have a few health issues. Old people aren’t buying iGadgets, 52 inch HDTV flat screens, and the other Chinese produced shit that falls in price.
The cumulative increase in Social Security payments since 2009 is about 6.2%. Think about that for a minute. This is six years. Does anyone believe inflation in the things senior citizens need to survive have only gone up 6.2% in the last six years? You’d have to be a blithering idiot or a Princeton economist to believe that bullshit. In addition to being screwed by the BLS on their Social Security payments, Helicopter Ben threw them under the bus and Grandma Janet is backing the bus over them again with their 0% interest rates on savings. A widowed grandmother with a modest $200,000 retirement nest egg could earn $10,000 of interest in 2008, to supplement her $16,000 of Social Security. Today she can earn $150 of interest, while her SS has risen to $17,000.
Do you think the demographic trends of 10,000 people per day turning 65, virtually no increase in their Social Security, the vaporization of interest income to save Wall Street bankers, and real inflation in the real world of 5% or more, has anything to do with the terrible retail sales and stagnant economy? Don’t ask a CNBC talking head or Fox News bimbo. Their job is to convince you all is well, while your grandmother is forced to eat Fancy Feast for dinner.
No cost-of-living increase for Social Security in 2016
By Jeffry Bartash
WASHINGTON (MarketWatch) – The downside to low inflation: Americans who collect Social Security won’t get an increase in their monthly checks in 2016. Annual increases in Social Security are made every year based on changes in a component of the consumer price index known as CPI-W. The index fell 0.4% in the period used by the government to calculate the annual increase in cost-of-living adjustments, the Labor Department reported Thursday. The extra benefits normally would kick in on Jan. 1. Social Security recipients got a 1.7% cost-of-living adjustment in 2015, 1.5% in 2014 and 1.7% in 2013. The last time there was no increase was in 2010 and 2011. Inflation has fallen sharply over the past year mainly because of a plunge in gasoline costs. Yet while all Americans benefit, seniors tend to drive less and not save as much because of cheaper gas.
Landlords will hike rents by 8% this year
By Quentin Fottrell
The majority of property managers are planning on showing little mercy to their tenants this year. Some 88% of property managers raised their rent in the last 12 months and 68% predict that rental rates will continue to rise in the next year by an average of 8%, according to a survey of more than 500 of Rent.com’s property management customers, which the site says represents thousands of rental properties and hundreds of thousands of rental units. That’s nearly three times the wage increase that most employees can expect this year.
The number of Americans spending more than half of their income on rent will rise by 11% from 11.8 million in 2015 to 13.1 million in 2025, a survey released last month by Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners, an affordable-housing group, found. This calculation is based on rents and incomes only growing in line with inflation (2% a year). In 2013, more than one-quarter of all renters — or 11.2 million renter households — were spending more than half their salary on rent, 3 million more than in 2000.
Rents Are Soaring BLS Admits, As Core CPI Comes In Hottest In Over A Year
http://www.zerohedge.com/news/2015-10-15/rents-are-soaring-bls-admits-core-cpi-comes-hottest-over-year
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Yup, the CPI is BS. It is not just price increases; also reduced contents for same price.
I took the top off of a brand new container of sink cleanser – it was 3/4 full (they make the item so that you can’t see the level of contents – who the fuck can remember the weights of all the products we buy).
In 2008, I could buy a jar of Kraft Parmesan cheese for $2.00 (and for a $1.00 if I waited for a sale). Today, that same item costs almost $4.89.
Quarts of Light Cream have doubled in price in that same time. I’m sure there are many, many others.
A box of Slim Jims at Wal-Mart had 28 sticks in them one month ago. I noticed last week there were 26 sticks in the box. That’s a 7.1% price increase without actually raising the price of the same sized box.
@Kokoda – Its even worse than you think, places are putting more filler into products these days than they were 20 years ago.
They add water, wheat flour, or high-fructose corn syrup to everything in the hopes of increasing their margins.
Admin,
Slim Jims are not good for you.
Bob.
http://www.organicauthority.com/whats-in-a-slim-jim-watch-this-and-youll-never-eat-one-again/
Bostonbob
I never eat Slim Jims.
Avalon on the other hand….
Boston Bob: Yeah, yeah, it’s true that Slim Jims are made from sweepings from the slaughterhouse floor and sawdust, but they sure are tasty! The Peruvian version is called cabanossi and along with the local version of Fritos Corn Chips (“Tor-tees”), you’ve got the breakfast of champions!
Where I live, I spend maybe U$D 600 a month on daily living costs, maybe a thou all in with the variables. Granted, I own my place outright, my 15 year old car outright, and per Mr. Q’s observation, don’t drive much, in fact hardly at all, plus which I grow a lot of my own food and get free-range eggs and chicken for “free” (feed costs are NOT free), but still, we’re talking about a cash outlay much less than what most US SocSec recipients get, although I agree that what they’re getting is screwed bigtime. The granny with the U$D 17.5k a year income would do just fine where I live, as long as she speaks Spanish.
Oh yes: I have a housekeeper and a groundskeeper. US Geezers: get out of Dodge! Let the Latinos have their place in the sun in the good ol’ USA: you can thrive in the places they’ve left behind!
You folks need to learn depression food skills. “Congee,” what all those auto workers in China getting paid $2.00 an hour eat. Take 10 quarts water; bring to boil; add 1 (yes one) cup rice; simmer just below boil for one hour. At end, drop in any leftover meat or veggies you have (if any). It will refrigerate and freeze well. PRESTO! RICE GRUEL!
Monefrio, I’ve got an expat buddy in cuenca, ecuador I spoke to sunday. My advice to him, get the hell out of dodge, and back to the states. Lots of latin america is financed by borrowing from China, which is financed by our trade deficit. Big storm cloud on that horizon. Could get ugly faster and harder than he might imagine
https://www.youtube.com/watch?v=sZrgxHvNNUc&feature=youtube_gdata_player
Crazy Train: Rents Skyrocket While Core Inflation Remains Nonexistent
https://confoundedinterest.wordpress.com/2015/10/15/crazy-train-rents-skyrocket-while-core-inflation-remains-nonexistent-fed-cant-generate-inflation/
At 75…..watch TV, play on the computer and eat. Get cheaper to live as you get older.
“GRANNY’S RENT IS GOING UP 8% WHILE HER SOCIAL SECURITY GOES UP 0% NEXT YEAR”
The heifer should have bought, instead of expecting the taxpayers to fund her retirement.
We got an email alert from our bank about a possible fraudulent charge- prescient- for $3.50 from JP Morgan Chase. Apparently if we do an online bill pay- on an account we have always done an online payment for- JP Morgan Chase now is allowed to dip their bill in for ‘processing fees’ @ $3.50 a pop.
It is never going to end until the very last cent is vacuumed from the cushions at Grannie’s house.
We’re in complete, wide-open Kelptocratic Pirate Statehood and they’re not taking prisoners.
Goes well with the article on “Fakery” – this is where the rubber meets the road, and the retirees are getting worn away.
And HFCS is the devil’s food – can’t stand the stuff, it makes me fat(ter) without any benefit at all. Should be illegal, but the corn lobby needs a sink for all that surplus….
Star: I’ve been in SA for 11 years and am very familiar with the absurd method of national finance down here, but the truth is if you live out in the boons (Cuenca is kind of, but not so much as where I live), you don’t have much to fear, at least not if you live a “Cheers” (everyone knows your name) kind of life. Granted, I have host-country-national relatives (dtr-in-law and grandkids) relatives and am bilingual, but even so, the locals are NOT the kind of folks who riot in cities, NOT even petty thieves, NOT feral and resentful folks, and in the last (and quite serious) crisis here, pretty much nothing worrisome took place. Yeah, sure, if one lives on the dole, big trouble could be coming, but these folks are used to trouble, practically take it for granted. As far as I’m concerned (and of course I could be wrong), SA is a better place to be if TSHTF than the USA. Time will tell.
This is nothing new…. this is the result of “printing” all the fiat currency into existence. Those on fixed incomes (Granny and Grandpa) take the full hit in two ways.
1) Misstated inflation eats away at their fixed incomes.
2) Below inflation interest on their meager savings.
They are in effect the proverbial canary in the coal mine. Once the Baby Boomers are in full retirement mode, they will soon find out how bad it can get.
It’s not his personal safety that concerns me. It’s the collapse in value of the real estaye he owns when ecuador runs out of money amd he can”t sell at any price. Ecuador uses USD as currency, his home is priced quite high at the moment. When USD stops bring pumped in, he may not be able to sell at any price. Becomes a white elephant in the middle of nowhere. Cuenca is a pain in the ass to get in and out of.
64 oz Orange Juice Container now 58 ozs. They now make the neck of the bottle smaller in diameter so the same size bottle holds less.
They now sell 18 packs of beer.
A 16 oz can of Libby’s pumpkin is now 14 oz – hardly enough to make a pie.
Sugar in 4 lb bags (that happened a long time ago)
Take a look at the spice jars (many are only half full).
Best reason to buy spices from Penzey’s – google them
@Star: Ah. Personal tunnel vision strikes again! I assumed your pal didn’t plan on selling because I don’t. From what a real estate agent pal told me, my place is worth five times or more than what I paid for the land and building the two houses, but where I am, there are no buyers that I know of who could afford that, so it’s moot. I plan to stay here for the duration, so I don’t care so long as the very low tax assessment doesn’t go up! One very good thing here, however, is your primary residence can’t be seized for failure to pay taxes. Yes, this could change, but from what I can see it’s highly unlikely. Don’t know what the tax laws are in Ecuador.
If you think Cuenca is hard to get in and out of, you’d HATE this place! Funny enough, it’s one of the reasons I like it. I guess I’ve assimilated. There are worse fates.
Landlords aren’t being heartless. They are being raped by regulation, local budgets and voters whom think taxing”evil, rich businessmen” has no downside.
My hometown lost 70% of the good jobs in the early ’00s, combo of China and regulation, the voters have gone to the polls twice to hit the commercial players with increased fees.
Result? Empty rentals as landlords can’t recoup carrying costs and the bulk of new jobs are minimum wage, with tax abatement, so the workers can’t afford rents anyway. As the cost to improve 100 year old homes to Section 8 standards – if it can be done at all – is outside most owner’s budgets, we now have more and more homes rotting into the ground and no buyers, or renters, in sight.
This is how you get the heartland to follow Agenda 21 and leave.
Insidious bastards are behind it all. Even the aware refuse to see what is going down in their own communities and continue to provide cover for our evil Overlords by calling it all “unforeseen” and “unintentional.”
Our way of life is being eradicated before our very eyes.
@Star, you crack me up. It’s like you truly believe OUR property values are going to be spared.
As long as you live in a home, especially a paid for one, the “value” means nothing.
Sales values only count for property taxes, or when you sell. Doesn’t put a dime in your pocket either way if you live in it.
Love your faith that this disaster is temporary Star. As if America will be okay and the jobs and real estate values are going to magically return to (historically ab-)normal pricing.
The past 40 years isn’t normal, it’s the freaking Tulip Boom in slow motion. Unless on a coast in a highly desirable neighborhood, property values versus wages are never staying as high as they are now.
What cannot be sustained won’t be. It really is as simple as that.
Social Security benefits would have got cost-of-living boost if elderly inflation was used
By Steve Goldstein
Published: Oct 15, 2015 1:03 p.m. ET
Social Security recipients miss out on $44 a month due to inflation measure
Social Security recipients are going to get no cost-of-living adjustment next year. But if the determination was based on the government’s own estimate of what inflation is like for those 62 years and over, there would be a rise in benefits.
Social Security is calculated based on the change in prices for an inflation measure called CPI-W during the third quarter. That dropped 0.4% from the third quarter of 2014 to the third quarter of 2015.
The Labor Department calculates an inflation measure called the CPI-E, which is the consumer-price index for Americans 62 years of age and older. That grew 0.6% in the third quarter of 2015. MarketWatch
But the Labor Department also calculates an inflation measure called the CPI-E, which is the consumer-price index for Americans 62 years of age and older. That grew 0.6% during the same period.
Put another way, Social Security recipients are missing out on an as much as $44 a month due to the way inflation is measured.
In fact, the elderly inflation measure has outgained the CPI-W for the last four years, using the same third quarter-to-third quarter time period.
The main difference between CPI-W and CPI-E is the proportion allocated to medical-care spending, which for the elderly is roughly double that of the general population. The elderly also spend more on shelter.
The Labor Department admits it has done about 20% of the research in constructing the CPI-E to create a “basket” of goods and services that it has done for the other measures of inflation. It is so experimental that the agency doesn’t even regularly publish the data, though, as shown here, it is available upon request.
More over, even if the agency had more faith in its elderly inflation measure, it would be up to Congress to change the COLA formula.
TE, not exactly. I think the opposite. I’ve had a long running disagreement with llpoh and recently figured out we weren’t talking about the same things. Same here. I don’t believe in an economy based on asset inflation. Get ready to work. Good post
In the entire history of COLA there have been only three years that didn’t have an increase: 2010, 2011. 2016.
A fundamental transformation sort of thing.
I always figured that owning your place by the time you retire would be the best plan. Even if its a piece of dirt with a shack on it.
A paid for RV Is a good idea also. You can move twice a year to stay in decent weather.
Yahsure. EXACTLY
Inflation Headlines Vs. Reality Reveals Outright Government Fraud
by Lee Adler • October 15, 2015
The US Government and the Fed measure inflation in a way that is tantamount to reverse Robin Hood theft. Government measures cheat savers and particularly senior citizens while subsidizing the wealthiest big banks and leveraged speculators. They do so by giving the Fed an excuse to perpetuate the ZIRP.
The headlines screeched this morning that consumer prices fell in September. The media dutifully reported that the seasonally adjusted headline number fell 0.2% month to month. The seasonally adjusted core CPI ex food and energy reportedly rose 0.2%.
Nobody in the media questions whether the data accurately represent inflation.
But these numbers do not measure “inflation” accurately. They exclude asset prices and do not properly measure consumer prices. They suppress the reported numbers primarily by vastly understating the rapidly inflating cost of housing, to which the BLS gives the heaviest component weight in CPI.
Seasonal adjustment also suppressed the numbers this month. The basis for using seasonal adjustments on CPI is weak. While prices do not rise on a straight line, there’s little evidence of consistent seasonal variation. On a not seasonally adjusted basis total CPI dipped by -0.15% in September. Core CPI rose by 0.3%.
On an annual basis, headline CPI was down 1.9%, mostly on falling energy prices, which have stabilized this year (gasoline prices up 13% since January). Core CPI was reported to have risen 1.9%. That’s still below the Fed’s 2% target.
Here’s the biggest problem with these numbers.
Housing costs account for 37% of headline CPI and 41% of core CPI. The government uses an artificial measure of housing costs called Owner’s Equivalent Rent (OER). It was imputed at a seasonally adjusted rate of 0.3% for September. The annual increase was 3%.
The BLS invented Owner’s Equivalent Rent as a replacement for actual housing prices in 1982 because housing inflation caused the CPI to increase too fast. The government created CPI as a means to index government benefits, salaries, and procurement contracts. The government gets off cheap when it undercounts housing inflation.
The imputation of a false, understated measure for housing costs has saved the government countless billions in the past 33 years and it continues to do so today. For example, in little noticed news today the government announced that Social Security recipients will get no increase in their benefits. What a scam. You can bet a few Congressmen will be hearing from constituents about that.
Actual house price inflation is running at approximately 6% annually. Actual rent increases are running at a rate close to that. According to national housing research firm Axiometrics, annual effective rent inflation was running at +5.3% in September. It was the 8th straight month of increases of 5% or more.
For the government to be imputing rent inflation in CPI at 3% instead of the actual 5.3% is nothing less than fraud. If housing inflation was included at the correct rate it would add 0.9% to annual core CPI. The correct rate of Core CPI would be +2.8%.
A useful measure for testing this is the BLS’s Producer Price Index for Finished Consumer Goods less Food and Energy. This represents wholesale prices of consumer goods to retailers, which are invariably passed through to the retail consumer. That number was essentially unchanged on a month to month basis in September, slipping by 0.05% (5 hundredths of one percent). It is up by 2.6% year over year.
So while the US Government finds ways to continually punish senior citizens, either by confiscating their savings with ZIRP, or denying them cost of living increases in the Social Security checks by using fraudulent data, in actuality, inflation marches on at somewhere around 2.6%-2.8% per year.
Core CPI Vs. Reality – Click to enlarge
Meanwhile the Fed remains behind the curve in recognizing that if measured honestly, consumer goods inflation has been above the 2% target rate it announced in 2012 all along. Sadly, the Fed favors a measure called PCE which is even more suppressed than CPI. As long as the government plays with the components of these measures to understate actual consumer price inflation the Fed will have a convenient excuse to never raise interest rates. The distortions and dislocations caused by ZIRP will continue to fester.
I wonder how that would play out. The economy collapses for whatever reason. The banks are looking for cash and assets to put on their balance sheets to save their asses. Do they commence calling in loans and mortgages? Will they start giving mortgage holders zero slack and begin immediately foreclosing on delinquencies?
So then what? Millions of people, including renters, are hurled out into the street, or forced to double up with someone?
Will the .gov fuckers sit back and watch as millions of potentially heavily armed and very pissed off people are left homeless?
Would the .gov fuckers declare a temporary moratorium on payments until things get worked out? But that would be bad for the banks.
Or what? I’ve always wondered about that. Time will tell, I guess.
Curious what Congress, Federal Workers, Welfare, Food Stamps, Section 8 etc will get…
A lot of grannies are getting SS when they never paid in a red cent. Virtually everyone receiving SS gets way more than the ever paid n. Given those two little factoids, why should any recipient of SS ever get another increase?
SS is a dead horse. Flog it, but it will not get up.
Why would anyone want to be a landlord. Ask the Admin about that.
There is no free lunch. SS is the attempted creation of a welfare perpetual motion machine. It is fast grinding to a stop. Granny should have taken care of herself, as SS is not an investment plan.
Lipoh’s got it here. but thus is the condition of the bought and paid for socialist state. No turning back, without the accommodating turmoil.
Some Medicare recipients could see Plan B premiums rise 52%
By Elizabeth O’Brien
Published: Oct 16, 2015 5:01 a.m. ET
Medicare open enrollment rolls around every fall, as predictable as pumpkin spice lattes and changing foliage.
And while reviewing your health insurance options may be harder than raking wet leaves, neglecting to do so could cost you.
Open enrollment began Thursday and runs through Dec. 7. During this time, beneficiaries can pick a new Medicare Part D drug plan, a new Medicare Advantage plan, or switch from original Medicare (coverage managed by the federal government) into a Medicare Advantage plan (coverage managed by private health plans that contract with Medicare) or vice versa.
Medicare supplement plans, also known as Medigap plans, operate under different rules and are not included in open enrollment.
This year’s open enrollment season begins against a backdrop of uncertainty for some 30% of beneficiaries whose Part B premiums stand to rise by as much 52% for next year. This group includes new beneficiaries, high-income beneficiaries already subject to higher Part B premiums, and Medicare recipients who have not yet begun to collect Social Security. These beneficiaries are not protected under the so-called hold harmless provision of federal law that limits the dollar increase in the Part B premium to the dollar increase in an individual’s Social Security benefit, to prevent a scenario where an individual’s Social Security check would decline from one year to the next.
On Thursday the Social Security Administration announced that Social Security recipients would receive no cost-of-living increase in their benefits for 2016. The roughly 70% of beneficiaries protected under the hold harmless provision will see no increase in their Medicare Part B premium, which will remain at $104.90. And yet, Part B expenditures have risen, so according to law the premium must rise accordingly.
Barring quick Congressional action to change the law governing premium pricing, the remaining 30% of beneficiaries may need to absorb the brunt of the premium increase, which the Medicare Trustees’ report estimated over the summer to be 52%. (The Department of Health and Human Services can lower premiums on its own as long as officials adhere to the law, which doesn’t offer that much leeway in this circumstance.)
Sue Varner, 65, of Louisa, Va. works full time as a receptionist and recently enrolled in Medicare. Since she doesn’t yet collect Social Security, Varner is one of the 30% who faces a premium increase, in her case from $104.90 to $159.30 a month. “I try to be philosophical,” she said of the impending jump. Her current budget already doesn’t leave much room for luxuries, and Varner, a cat and dog owner, plans to trim her pet expenses if she has to pay more for Part B.
Hard to feel sorry for them when this is what they voted for.
“Mitch McConnell is demanding to reduce the annual cost of living adjustment to the Social Security payments that millions of Americans rely on each month. He also wants to raise the eligibility age for Medicare and limit the benefits available to recipients.”
http://www.thefiscaltimes.com/2015/10/13/McConnell-s-Last-Stand-He-Wants-Medicare-Social-Security-Cuts-Raise-Debt-Limit