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Cost of Living
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The Social Security Administration (fondly called SSA) sent me a notification that social security benefits would be increased by 2.3% starting in January.

The increase is intended to be a cost of living adjustment for social security recipients, to allow them to continue to live in the style to which they have been forced to become accustomed.

It seemed to me that prices had increased more than 2 or 3 percent during 2007, so I went in search of further information on cost of living adjustments and the rationalization therefore.

This is what I learned. The official inflation statistics give relatively weight to some things that are very important to those of us ordinary mortals (not those in the upper stratosphere of government "leaders" or corporation CEOs). The government economists and even the Federal Reserve Board, look at inflation in terms of "core" inflation, which is calculated based on the prices of goods and services excluding food and energy.

This makes sense to economists because food and energy prices are so volatile, therefore the health of the economy is declared to be independent of events of wars or weather.

So if you are willing to cut way back on food and heating fuel and gasoline, the cost of living increase will meet your needs quite nicely. Gas has been rising at several times the inflation rate over the past five years, but so what? Members of Congress, the President, CEOs, and suchlike don't have to worry about paying at the pump....

Anybody who does the grocery shopping recently is only too aware of the increases in prices of things like milk, chicken and beef. Overall, food prices have jumped by 4.3% in the past year from January through August alone, about twice the rate of core inflation.

So our leaders can trumpet a "healthy economy" ignoring the fact that medical costs have been going up nearly twice as fast as the overall inflation rate and families more and more rely on two incomes to keep afloat.

Can you say "spin"?

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