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Friday, January 9, 2009

The $38 Billion Shadow Stimulus



While a new Congress and a new White House debate details of an economic stimulus plan, Social Security recipients are already reaping a $38 billion windfall.

The extra money comes thanks to a quirk in the Social Security Administration's regularly scheduled cost of living adjustment.

Every year, Social Security payments increase along with the Consumer Price Index for Urban Wage Earners and Clerical Workers. The increase is set at whatever the change in inflation was between July and September from one year to the next.

The program that so many hate and call broken, is one of the few things helping to sustain the economy and keeping millions of people from experiencing real economic hardship and depression. If fiscal conservatives get their way the U.S. will privatize Social Security and the results could be disastrous as retirement savings are exposed to the vagaries of the stock market. Remember what happened to Fannie Mae and Freddie Mac once they were privatized.
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4 comments:

  1. JeffJanuary 9, 2009 at 9:05 AM

    Hey Mike!

    I wrote on my blog, jahhou.blogspot.com, yesterday, that the Social Security and Medicare Trust Funds (along with Saudi Arabia and China) are beneficiaries of the rise in Treasury prices. All we have to do is shift some of the trust funds into stocks before the inflation scare I'm predicting for 5-10 years from now and they'll be all set to participate in the next secular bull market, which should begin around 2015-2020. Keep up the good work!

    ReplyDelete
  2. BillyJanuary 12, 2009 at 3:38 AM

    I guess that Mikes Radio show is no longer available on Apple. Perhaps it is some sort of end of year contract situtation.

    I go to the itunes store and type in Biz Radio in the search box. Up comes (under podcast) Mike Norman Del Walmsley and sometimes Dan Frishberg.

    I can go into Dels Show and Dans Show and there are new episodes. If I go into Mikes Show there is nothing since 12/31. I have contacted Apple several times through the itunes interface with no response.

    In the meantime I am downloading the show from this weblog and listening that way. Downloading through Apple would be a lot more convenient.

    Billy

    ReplyDelete
  3. mike normanJanuary 12, 2009 at 10:17 AM

    Billy,

    I sent this to our tech guys at BizRadio. Hopefully they can figure out what the problem is.

    ReplyDelete
  4. BillyJanuary 12, 2009 at 1:47 PM

    Thanks Mike!

    Billy

    ReplyDelete