According to former hedge fund manager Burce Krasting, Bernanke has said dozens of times that he wants to boost inflation in his effort to lift stocks. He’s succeeded in pushing up the cost of things over the past year. Everyone is paying a price. Social Security is no exception. As it turns out, Ben’s policies have been hitting SS in a number of negative ways. Ben is driving up the costs over at SS and at the same time he is killing their interest income.
We get inflation numbers for September next week. This is an important data point for some 55 million recipients of Social Security checks. On the assumption that there is no (little) change in the MoM numbers the CPI-W will come in at 223.4. This number is used to calculate the average for the fiscal 4th quarter. The result is then compared to the 2008 fiscal 4th Q. My numbers:
CPI-W 4th Q 2008 = 215.495
CPI-W 4th Q 2011 = 223.110
COLA increase for 2012 = ~3.5%
This is not good news at all for the folks at SSA. The COLA increase will add $25 billion onto the existing expense base for 2012. On top of that there will be the increase in the total number who receive monthly checks (SS is getting 10,000 new beneficiaries every day). In 2011 the new (minus dead) beneficiaries added $25b to the cost of running the program….
Read more: http://brucekrasting.blogspot.com/2011/10/social-security-to-bernanke-youre.html#ixzz1b3lewqiG
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