Regarding FED Chair Yellens first policy statement: This is my interpretation with paraphrase: I AM THROUGH PRETENDING THIS FED POLICY IS ABOUT ADDRESSING HIGH UNEMPLOYMENT AND MARKET STABILITY-----WE ARE PROUD TO BE A CRONY AND CORRUPT BRANCH OF WALL STREET WORKING ONLY TO ENRICH THE RICHEST! This was Yellens announcement and it even made the most corporate of mainstream anchors----Scott Pelley of CBS hang his head in shame. We all have known the FEDs policies had nothing to do with its stated mission of controlling unemployment and stabilizing the US economy, but after several years of the Obamas term and policy that created economic stagnation and an unemployment rate of 35-45% across the country with an economy ready to implode from a bond market bubble-----Yellen said, heck, we can no longer hide it. IT IS IMPORTANT TO SHOUT AND DOCUMENT THAT IT IS ILLEGAL FOR THE FED TO MOVE AWAY FROM ITS STATED MISSION. IT CANNOT JUST ARBITRARILY CHOOSE TO EMBRACE POLICY THAT HARMS THE PEOPLE IT IS SUPPOSED TO PROTECT. So, where Greenspan shouted LET THE MASSIVE SUBPRIME MORTGAGE FRAUD CONTINUE AT RECORD SPEED, Bernanke served saying THE CRONY WALL STREET MARKET SERVES TO MAKE A FEW THE RICHEST IN WORLD HISTORY AND THAT IS WHAT THE FED IS ALL ABOUT UNDER ME! Yellen is posturing that she will super-size wealth inequity by using the FED in crony finance just as Bernanke did. What the heck, US has no public justice system right now they say! You know, Trans Pacific Trade Pact makes US law enforcement against corporations NULL and VOID and Wall Street considers TPP already in place! Lets take a look at what Yellen is telling you and I. After all we are peasants waiting to have law and policy pushed upon us and not citizens who write law the works in the public interest. Manipulating inflation rates and interest rates to zero are near zero works to give corporations free money while keeping the public impoverished. So, zero interest rates make it impossible for people to place their money in a savings account -----the goal is to force everyone back into a stock market we all know is criminal and corrupt. If you lose money to inflation unless you place it in the stock market-----you are being fleeced. So, for several years now the American people have lost millions of dollars to manipulated interest rates of zero. Meanwhile, corporations are being paid by the FED not to work.....hire.....by giving them free money to invest in the stock market and expand overseas instead of growing the domestic economy. WAIT UNTIL THESE CORPORATIONS GET RICH ENOUGH AND THEY WILL ALLOW IT TO TRICKLE DOWN WALL STREET SAYS. Remember when Obama ran in 2007 saying he did not believe in trickle-down and yet-----that is the entire enchilada of his administration. ZERO PERCENT INTEREST MAKES FOR PUBLIC LOSS OF MONEY IF TRYING TO SAVE IN A SAVINGS ACCOUNT. IT IS MEANT TO FORCE YOU BACK INTO THE STOCK MARKET AND REMEMBER.....IT IS READY TO IMPLODE! Is the Fed Waging War on Bank Savers? By: Brian OConnell NEW YORK (BankingMyWay) — A new white paper on Federal Reserve economic policy draws the sharp conclusion that the Fed is waging a three-pronged war on bank savers. Obviously, the Fed, led by chairman Ben Bernanke, has held fast to its low interest rate policy since the Great Recession began in 2008, and hasn’t let up since. According to the Federal Deposit Insurance Corporation, the national average savings account rate is in the basement, at 0.14% , and the BankingMyWay Weekly Savings Rate tracker mirrors that number closely, at 0.15%. If there’s any upside to the story, it’s that the Fed has decided to end the latest round of its monetary easing program and will likely no longer use artificial means to tamp down U.S. interest rates. But for bank savers, the damage is already done, and it’s not all just about interest rates. Here’s a look at what one research outfit is calling Ben Bernanke’s “war on bank deposit savers” and the three ways it’s already under way: Paltry savings rates at big banks. Big banks like Bank of America (Stock Quote: BAC) and JP Morgan Chase (Stock Quote: JPM) are offering savings rates at below 0.05%, points out FedUpUSA.org, a consumer financial advocacy organization. Since the 1960s the Fed has gone out of its way to give Americans a viable investment and savings alternative to the stock market, often keeping the key Fed Funds rate above 5%. But those days are long gone and bank deposit investors are paying the price. Inflation is crushing bank deposit yields. In its April 2011 white paper, “Federal Reserve Punishes Savers By Subsidizing Big Banking Bailouts,” FedUSA.org argues that the Fed is trying to steer U.S. investors into the stock market, in large part by keeping interest rates so low that it isn’t worth it for investors to place their money in bank savings vehicles like certificates of deposits and money market accounts. The Federal Reserve is doing everything within its power to get people to spend or speculate in the stock market and hopefully over time create enough inflation to devalue our current debts, the FedUSA paper says. This is why mortgage lending has gotten tougher (aside from government backed loans), getting a credit card is now for credit worthy customers and getting a small business loan is much more stringent. The purpose is to work through the current banking led fiasco by pushing on the debt to working and middle class Americans through lower savings rates and a push for higher inflation. When inflation rises, as it has so far this year, bank CDs and money market accounts can’t keep up and thus are significantly reduced in value. A smaller choice of consumer banking programs. Big banks and the Fed are currently entangled in a vicious wrestling match over bank fees. Front and center in that war are swipe fees that banks charge merchants who accept debit cards. The Federal Reserve is dropping those fees, from 44 cents per transaction to 12 cents per transaction, and in response, banks with $10 billion or more in assets are cutting bank credit card reward programs and are amping up bank deposit and ATM fees. The Fed just hasn’t learned a lesson that consumers already know too well – never get between a banker and his fee revenues. Going forward, can consumers look forward to a break on the so-called ‘war on bank savers”? Probably. As rates rise, which they eventually will now that the Fed has taken its foot off the low-rate pedal, bank depositors will earn more on their savings and investments. But it won’t happen overnight. It’s going to take a while for things to wind down. —For more ways to save, spend, invest and borrow, visit MainStreet. *************************************** Whether you are a supporter of CPI-E which changes the way COLA are calculated to address the Cost of Living today or if you are someone who knows inflation today is far greater than even CPI-E would calculate, the point is that the manipulation of inflation and COLA has gotten too far out of hand. As we watch cereal boxes shrink considerably while prices rise....when my cat litter jumps from $6 to $10....we have considerable inflation. Health care costs are of course the biggest inflation cost for Americans and it is not even included in the current CPI. AS WE REBUILD THE DEMOCRATIC PARTY FOR LABOR AND JUSTICE WE NEED TO REMEMBER THESE LOSES TO SOCIAL PROGRAMS LIKE SOCIAL SECURITY AND VETERANS BENEFITS! Do not think it is hyperbole when economists predict US inflation will soar when the FED is forced to change these manipulations. Inflation may indeed hit 10-15% or higher. Manipulated inflation rates by government leading to lower COLA on Social Security for 2013 10:50 AM John Williams, Shadowstats, With the Federal Reserve and Federal government blatently manipulating the true rate of inflation in the economy, the results for 2013 are going to be a 1 or 2% COLA increase for Social Security recipients next year. Charts courtesy of Shadowstats Social Security recipients shouldnt expect a big increase in monthly benefits come January. Preliminary figures show the annual benefit boost will be between 1 percent and 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975. Monthly benefits for retired workers now average $1,237, meaning the typical retiree can expect a raise of between $12 and $24 a month. The size of the increase will be made official Tuesday, when the government releases inflation figures for September. The announcement is unlikely to please a big block of voters _ 56 million people get benefits _ just three weeks before elections for president and Congress. According to John Williams and Shadowstats, true inflation for 2012 is between 5 and 9%, dependent upon which model (1980 or 1990) one chooses to reference. The government has manipulated real price inflation for more than two decades to ensure COLA increases are not in line with real inflation, to both save 10s of billion of dollars in benefit payouts, and to hide the fact that their deficit spending is causing massive inflation on essentials people need like food, energy, and rents. Going into the 2012 election, the current administration doesnt want you to see the 30-80 rise in food prices over the past four years, and are making sure their media propagandists lie to you on what the real inflation rate is in the economy. *********************************** Bernanke and neo-liberals in Congress along with Obama have tried to pretend inflation is at zero or close when everyone knew it wasnt. Inflation has been at 3-5% just as always with the inflation rate ready to explode as soon as the FED ponzi scheme of QE has maximized the FEDs debt ratio to its limit, which is coming now. This is why Yellen is having to back out of QE----the FED is maxed with debt. When Yellen does this the manipulation of inflation rate will end and they will not be able to hide the fact that inflation has been higher than stated and will grow to a very high rate when QE ends and interest rates rise to normal. Remember, inflation was manipulated to zero to make it look as though the FED policy was not hurting the economy. At the same time these manipulated inflation rates did a number on the publics wealth yet again! THOSE NEO-LIBERALS TRYING TO SUCK ALL THE WEALTH THE PUBLIC CAN AMASS ANY WAY POSSIBLE. That is what FED policy has been about since the 2008 crash. So, the zero COLA for several years lowered seniors Social Security payments by on average a hundred dollars a month as did the Veterans payments. This is big money for a class already teetering below the poverty line. It is why the national debt fell during Obamas term---a success to Wall Street. National debt paid by falling social safety net cuts while Wall Street fraud stays with the looters. ARTIFICIALLY MANIPULATED INFLATION RATES OF ZERO CREATED THE LARGEST CUTS TO SOCIAL SECURITY IN THE PROGRAMS HISTORY COURTESY OF NEO-LIBERALS IN CONGRESS AND OBAMA. This is no surprise.....Obama laid out these plans in 2009.....the question is why have no democrats shouted out against all of this. If your incumbent has not sounded the alarm these few years....THEY ARE NEO-LIBERALS AND GET RID OF THEM. ************************************ Keep in mind these inflation rates of zero are fake.....all articles on the subject show everyone knows inflation was the normal 3-5% yet the FED listed it at zero and the Federal government under Obama allowed this fake inflation rate be used for SS and Vet COLAs. IT WAS DELIBERATE TO IMPOVERISH FURTHER PEOPLE RECEIVING MONEY FROM A PUBLIC TRUST. So, we need labor and justice politicians to keep in mind seniors and Vets will need these several years of losses to monthly payments replaced with higher COLAs for several years. We may need 7% COLAs for example over a decade to make up for losses these several years. This actually fits with progressive policy that sees Social Security increases by larger amounts as we replace all the stolen pensions and retirements with Social Security. Social Security COLA Doesnt Match Inflation Retirees are falling further behind each year as medical costs rise by more than overall inflation. By Philip Moeller Aug. 9, 2010 Leave a Comment SHARE Last weeks annual trustees report on the financial health of Social Security showed the program did not suffer serious erosion during the past year. Current Social Security resources are sufficient to pay all benefits for the next 27 years. Thats hardly the self-sustaining funding model that wed like to see but its good news nonetheless. However, it wont stop efforts to fix the program. And it wont halt the discussion over the adequacy of the annual cost of living adjustment (COLA) with which Social Security tries to keep retirees benefits from being eroded by inflation. Low rates of inflation in the year ended last fall caused the COLA to be zero for the first time in the 25-year history of these annual adjustments. Recipients received a one-time $250 payment, which helped compensate for that and was also pitched as an economic stimulus program. Now, were coming up on a second year with little if any inflation, as measured by a version of the Consumer Price Index used to determine the Social Security COLA. The index measures price changes for working people. Legislation has been introduced for another $250 payment, and AARP and other groups are lobbying for its approval. However, the fiscal picture is much darker than it was even a year ago. And while Social Securitys finances may have held up, the same is not true of the governments budget. We are awash in red ink with no end in sight to deficits. With mid-term elections this fall, just about everyone has found religion when it comes to government spending. So, the argument for another round of make-good Social Security payments is a tougher sell in 2010 than it was last year. However, according to a recent academic study, the fairness of such a payment is beyond dispute. The study reviewed Social Security payments over many years, backed out spending on basic Medicare premiums (for part B physician and outpatient services) and other out-of-pocket medical spending, and then compared the remaining amounts with money that recipients paid for other goods. Researchers studied a group of older retirees who turned 65 in 1983 (the year the COLA began), and a second group of persons born in 1928. The authors -- Gopi Shan Goda and John B. Shoven at Stanford and Sita Nataraj Slavov at Occidental College -- found the value of recipients benefits for non-healthcare spending had eroded by about 20 percent for men and nearly 27 percent for women. Those are big cuts: one out of every five dollars in benefits is effectively gone for men; one of every four dollars for women. And their findings probably understate the actual ground lost, because the study did not include the cost of other health insurance premiums when considering out-of-pocket healthcare spending. Besides Part B premiums, other insurance includes Medicare Supplement, Medicare Advantage, Part D prescription drug coverage, and other private coverages. To the extent that the rise in premiums for such insurance has exceeded the overall rate of inflation, the studys findings would need to be adjusted to show further erosion in the effective non-medical buying power of Social Security benefits. And by all accounts, health insurance price inflation has far outpaced the rise in overall prices. Of course, these results assume no other income besides Social Security, the researchers say, but a sizable fraction of the elderly depend on Social Security for the majority of their income: 64 percent of beneficiaries rely on Social Security for 50 percent or more of their income, and 35 percent of beneficiaries rely on Social Security for 90 percent or more of their income. Even if funds were available, fixing this situation is no easy matter. This is because there are two root causes for how healthcare expenses erode the true value of Social Security benefits. The first is the rate of inflation for such expenses. The second is the fact that people simply use more healthcare as they age. Even if medical costs did not rise faster than the prices of other goods, the study says, as retirees aged, their medical spending would still tend to increase as a share of income. There is an experimental government price index called CPI-E that is designed to measure the actual spending of retirees. It thus includes more weighting for medical costs. The CPI-E has increased faster than the CPI-W over the past 20 years, the study says, due primarily to the relative rise in health costs, and the fact that the elderly spend more on health care than the non-elderly, even after taking into account the availability of Medicare. Using the CPI-E to determine the annual COLAs for the studys subjects would have narrowed the gap, with men falling only 11 short of maintaining their effective buying power for non-medical items, and women falling 18 percent short. But the financial consequences of even this seemingly simply shift are huge. Remember that 27-year estimate for Social Security sufficiency? According to one study, using the CPI-E to set annual COLAs would slice five years from that cushion all by itself. Further, like all measures of price change, the CPI-E does not even try to factor in changes in product quality. The $1,000 television set you buy today is vastly superior to the $1,000 set you could have bought 20 years ago. Such qualitative improvements have been enormous in healthcare. With all the talk about changing Social Security, it would seem to make great common sense to take a careful look at the COLA mechanism. What good is it to put the program on a sound 75-year trajectory again if the interests of seniors arent appropriately considered and protected in the process? ************************************* You will not hear corporate media explain to you that Obamas myRA is Social Security privatization -----a republican plan to end yet another public Trust only a politician running as a democrat is doing it. You will hear corporate NPR advertise this policy as a good thing for the impoverished masses who just cannot seem to save money themselves. THATS A NEO-LIBERAL FOR YOU AND ALL MARYLAND POLS ARE NEO-LIBERALS! Wall Street wants all of the Social Security and Medicare Trusts back in the stock market where Wall Street can use the money to maximize profit with leveraging that always sends public money out to act as fodder in investments with huge losses over and over and over. Who wouldnt want Social Security tosses into the stock market? EVERYONE!!!!! The same plan may be in the works for Social Security. In his speech, the President announced a new retirement savings program, MyRA. Although the details of MyRa are not clear, it is based on creating individual retirement accounts (IRAs) for workers who don’t currently have them. Obama Lays Groundwork to Destroy another Social Insurance by MFlowers By Margaret Flowers Originally published in GreenShadowCabinet.us President Obama’s comments about the health law in his State of the Union speech lacked substance and were primarily focused on selling his law, and more insurance, to the public. He avoided discussing the root causes of our ongoing healthcare crisis and set the ball in motion to destroy another pillar of our social infrastructure, Social Security. The bottom line of President Obama’s comments on the health law was that more people have health insurance and insurance companies can’t deny people based on pre-existing conditions. He urged everyone to make their friends and family buy insurance. What he didn’t say is that people with health insurance in the United States still can’t afford the care they need and face bankruptcy if they have a serious health problem. And although insurance companies cannot deny policies to people with pre-existing conditions, they have a number of ways to avoid paying for peoples care. The health law perpetuates a health system that treats health care as a commodity so that people only receive the amount of health care they can afford rather than treating it as a public good, as does every other industrialized nation. This is the root cause of the health crisis in the US. Any system that leaves healthcare in the marketplace, because it is based on generating profits for investors, will result in inequalities of access to care and rising healthcare costs. Using a market-based model for social insurances sets a dangerous precedent. Traditional social insurances are provided by the government and are paid for through taxes. They are designed to meet the needs of the public rather than to provide a profit and so they guarantee a universal set of benefits for everyone. Each pays in according to their means. The health law is doing the opposite. It is driving our entire health system to one that is provided by private entities and is paid for by individuals. Each person gets the amount of coverage they can afford. Those who cannot afford what they need are left to suffer. Since the health law was signed, there has been greater privatization of Medicaid and Medicare and billions of taxpayer dollars have been used to sell and subsidize private insurance. If we continue on this path, down the road Medicaid and Medicare will be rolled into the health exchanges and only private insurance will be available. The same plan may be in the works for Social Security. In his speech, the President announced a new retirement savings program, MyRA. Although the details of MyRa are not clear, it is based on creating individual retirement accounts (IRAs) for workers who don’t currently have them. What we do know is that Social Security has been under attack throughout the President’s time in office. Rather than doing what is needed, raising the cap, or going beyond that and raising benefits, there have been attempts to cut benefits and raise the age of eligibility. The public is being told that Social Security is in a crisis but is not being told that this ‘crisis’ is intentional. Unlike Social Security, IRAs are managed by financial institutions that profit from them. MyRa is another gift to Wall Street by President Obama. We are living in an era of big finance capitalism, a predatory capitalism, based on the neoliberal economic model. It is being applied to every aspect of our society through dismantling of our public programs and privatization of our resources and services. Under this system, the basic necessities of each person are not guaranteed. Instead, it is designed to funnel wealth to the top by making everything into a commodity, a profit center for investors. This path will continue until we rise up to challenge it. We must understand what is happening and that the destruction of our public programs is intentional, but not inevitable. There are solutions to the crises we face. For example, a health care system based on a non-profit Medicare for all model and a retirement system based on a stronger Social Security. These are obvious solutions, supported by a majority of Americans and logistically easy to put in place – if the government actually represented the people. The President closed his remarks on health care by saying, “So again, if you have specific plans to cut costs, cover more people, increase choice, tell America what you’d do differently.” The last time he said that in a State of the Union speech, I tried to respond and was arrested. This time we must respond together by working to build a mass social movement that has the power to make our demands a reality. ~ Margaret Flowers MD, Serves as Secretary of Health in the General Welfare Branch of the Green Shadow Cabinet. ********************************** It has been a sad state of affairs to watch the neo-liberal media and economists send out all kinds of propaganda on Social Security and threats to its future. Keep in mind, neo-liberals are committed to ending all War on Poverty and New Deal programs----that has to happen for Trans Pacific Trade Pact to become enacted. So, neo-liberals are creating drama around Social Security to hide the ultimate goal----myRA. As we are fighting Chain CPI and fake inflation rates and direct cuts to how much Social Security payments will be, the policy neo-liberals are pushing simply ends Social Security as a Federal program. You do not hear one neo-liberal economist saying anything about how myRA will end Social Security-----they are saying we won the fight to protect Social Security from Chain CPI. Chain CPI was not good but myRA ends SS for goodness sake! IF YOUR PUNDIT OR POLITICIAN IS NOT SHOUTING THAT myRA FROM OBAMA IS ABOUT ENDING SOCIAL SECURITY-----THEY ARE NEO-LIBERALS! Baker, Reich, Krugman are all neo-liberal economists feeling the American peoples pain yet never quite able to shout that neo-liberalism is the killer. Social Security COLA to increase by 1.5 Percent in 2014 Written by Dean Baker Wednesday, 30 October 2013 10:00 Changing the basis of the COLA to the chained CPI would cut an already modest cost-of-living-adjustment. The Social Security Administration has announced the Social Security cost-of-living-adjustment (COLA) will be 1.5 percent in 2014. Beneficiaries will begin seeing the increase in their checks in January. It is worth noting that this COLA based on the consumer price index for wage and clerical workers (CPI-W) is likely to be lower than the rate of inflation shown by the BLS experimental elderly index (CPI-E), which is designed to reflect the purchasing patterns of the elderly. The biggest differences between the two indices are the weights assigned to health care and housing, with both components accounting for a much larger share of the CPI-E than the CPI-W. The price of medical care services was up 3.1 percent in August from its year-ago level. The price of the CPI’s shelter component was up 2.4 percent from its year-ago level. As a result of the more rapid price increases in these components, the CPI-E would likely show a rate of inflation that 0.1-0.2 percentage points higher than the CPI-W. This would suggest that the rate of inflation seen by seniors is somewhat higher than the COLA they are now getting for Social Security. However, this gap would increase if the COLA indexation switched to the chained CPI (CCPI-U). This index typically shows a rate of inflation that is 0.2-0.3 percentage points lower than the CPI-W. The reason for the difference is that CCPI-U incorporates the impact of substitution on consumption costs. If the price of apples rises less rapidly than the price of oranges, and people switch from consuming oranges to apples, then the CCPI would lower the weight it assigns to oranges and increases the weight it assigns to apples. This leads it to show a lower measured rate of inflation, which arguably reflects actual patterns in consumption. While the CCPI-U may be picking up substitution patterns for the population as a whole, it is not clear that it accurately reflects substitution patterns among seniors. The goods disproportionately consumed by seniors, health care and housing, don’t lend themselves to easy substitution. Furthermore, it is not clear that seniors can substitute for other goods with the same ease as the rest of the population. Unfortunately, neither BLS or the proponents of adopting the chained CPI for the COLA have done research on this topic. In short, there is some reason to believe that the current COLA already does not adequately compensate seniors for the rate of inflation they experience. This problem would be worse if the basis for the COLA is changed to the chained CPI.
Posted on: Thu, 20 Mar 2014 15:33:08 +0000
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