Social Security: “No inflation adjustment … again!”

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from Uncommon Wisdom,

The system is rigged against the recipients.

Anyone depending on Social Security recently got another bad piece of news — namely, the fact that benefit checks will not be getting an inflation adjustment for 2016.

This will mark the third time in six years that seniors haven’t gotten a Social Security cost-of-living increase … yet prior to 2010, recipients had gotten one every single year since 1974!

Meanwhile, the Senior Citizens League says Social Security recipients have lost nearly a fourth of their buying power over the last 15 years.

That’s based on things like housing costs rising 44% since 2000 … heating oil jumping 159% over the same period … and even things like eggs more than doubling in price in the new millennium.

So what’s going on?

This is because of the way the CPI is constructed.

Here are just four reasons why the measure falls short of accuracy:

#1. Hedonic regression

#2. Product substitution

#3. Most taxes are excluded

#4. Bizarro real estate figures

The bottom line: The CPI is not an accurate measure of what we experience … and it’s definitely not properly weighted toward the things that most retirees actually spend their money on.

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