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hedgehog

(36,286 posts)
Thu Apr 11, 2013, 10:21 AM Apr 2013

Chained CPI- did anyone else notice that Obama is bargaining

cuts in the future ( Which can be rescinded) for revenues today?

Also, I am wondering where all the magic numbers regarding Chained CPI come from? It all would depend on how the chain is defined. If there is say, a temporary massive price increase in strawberries and blueberries are substituted, that is a reasonable substitute for that quarter. But, in the long run, wouldn't the price for strawberries would return to normal? Wouldn't the prices for both strawberries and blueberries over the long run gradually increase with inflation? I don't see how seniors would take a hit or if there would be real savings.

On the other hand, if fruit gets dropped from the basket should prices go up, then the Chained CPI is an end to cost of living increases. It all depends whether like is substituted for like, or whether something is dropped entirely. Even today, there is some dispute over what items should be in the basket.

Edited to add:

8 replies = new reply since forum marked as read
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newfie11

(8,159 posts)
1. This is very confusing
Thu Apr 11, 2013, 10:39 AM
Apr 2013

So now we eat what the government says is cheapest or go without because we can't afford it.

Seems like an stupid idiotic idea to me.

TreasonousBastard

(43,049 posts)
2. Of course it's all Beltway Bullshit...
Thu Apr 11, 2013, 10:40 AM
Apr 2013

Some analysts have noticed that the chained CPI is getting closer to the CPI and the two might be almost identical at some point in the near future.

Also forgotten in all this is that the CPI itself is occasionally refigured when the populace changes its overall buying habits.

Looking at some real, honest-to-god, numbers, if the change should apply to my monthly SS check, I'll lose less than five bucks a month next year. $60 a year. If I live to 80, that's less than a grand over my lifetime, and that's if nothing else changes. Interesting how the discussion changes from not getting so much of a raise to losing money. No one will be "losing" money unless you count hoped for money not received as losing it. In that case I just lost 36 million because my lottery ticket didn't win.

Compounding adds a few bucks, but not enough to get hysterical over. If I live to 80 I'll no doubt have a lot more on my failing mind than the grand or so I lost due to SS changes.

And, yes, 20-30 million more SS recipients in the next few years will have enough of a voice to get damn near anything we want back from Congress-- and probably more.

So, let's shut up about this and get back to things actually worth worrying about.

CTyankee

(63,769 posts)
3. Here's the problem. With seniors the real issue in their market basket is health care
Thu Apr 11, 2013, 10:59 AM
Apr 2013

costs. I have very little flexibility in my health care costs. I can go to the supermarket and buy the store's own brand and save some money over name brands. I can stop eating out. I can buy clothes only on sale, etc, etc. But health care costs such as my Medicare supplement is something that increasingly takes up more and more of my budget So your "when the populace changes its overall buying habits" is not really applicable toward seniors, if that is the underlying premise of CCPI. At age 80 you may not care about that grand but your kids will. If you have to fall back on them the ripple effect to their own lives could be a hardship on them and your grandkids.

You make a good point about the coming increase in SS recipients and what effect that will have on our lawmakers (and let's add in their grown kids as well). My hope would be that they would get universal health care finally accomplished and lift the cap on wages subject to SS taxation. Everybody is paying in and costs are spread out over a wider population. Along with that is enough stimulus spending to kickstart the next technological revolution, putting more people back to work and paying in. The minimum wage is lifted, promoting more consumer spending.

These are all things that should and can happen.

TreasonousBastard

(43,049 posts)
5. You're right about that. I have VA coverage...
Thu Apr 11, 2013, 11:18 AM
Apr 2013

that's good enough and almost completely free so that I haven't bothered to use Medicare yet. Even prescriptions with an $8 copay. If you make under 12 grand a year, they pay you 45 cents a mile or so for you to get to the VA center. That was a nice bonus during some very dark days.

But, I'm just incredibly lucky to have that and too many others are hurting-- or using up their savings paying for health care. My grandmother died broke entirely from end-of-life expenses that came from her once considerable estate.

Yes, we absolutely have to deal properly with health care, and while Obamacare was a fair effort in the face of irrational opposition, it's far from a solution.

SS and two part-time jobs keep me going for now, but when I can't work any more I'm not sure what I will be in for. But the problems won't be solved with that 5 bucks, that's for sure.









hedgehog

(36,286 posts)
6. Let's hope that the discussion informs more people of the need to eliminate the deductions cap.
Thu Apr 11, 2013, 11:58 AM
Apr 2013

Believe it or not, a lot of people are unaware it exists!

 

Bluenorthwest

(45,319 posts)
4. Rather than argue points, let me inform you that SSA and many other sources provide any numbers
Thu Apr 11, 2013, 11:13 AM
Apr 2013

you'd like to find, comparisons of various CPIs, charts, pros, cons, particulars that could be used by proponents of many options, because none of the options being discussed are without flaw each method has pros and cons. So there are lots of numbers that are as good as any get, and if you go look you can find some to support your view, my view, some new view we patch together after reading all that crap, I'm saying it can be spun many ways, but the numbers and the systems behind those numbers can be found, in dull and endless detail, by anyone who cares to go find them.
What bothers me about all of this is that neither the chained nor the currently used CPIs are really any good and that the discussion is framed around how not to pay COLAS, when the likes of Nixon instituted the COLA in order to pay more to keep up with inflation. Nixon said it was an American right to have SS protected from inflation, and the discussion should be about how to best protect those benefits from the ravages of rising costs, the objective should be the protection of beneficiaries, not the finding of a chart that can excuse offering the least possible protection. That is it should be if our Party is to be even as liberal as Nixon on this issue. An extremely low bar to meet, to remain to the left of Nixon as a Party.....

 

jerseyjack

(1,361 posts)
8. They can always get their seafood from Friskies instead of Bumble Bee. And horsemeat ain't
Thu Apr 11, 2013, 02:45 PM
Apr 2013

too bad. Ask Ikea.

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