Saturday, March 21, 2009

No COLA's for 2010?

From MOAA… COLA Making Headway

This week, the Bureau of Labor Statistics announced the consumer price index (CPI) for February. The CPI is the metric used to calculated annual cost of living adjustments (COLA) for military retired pay, Social Security and survivor annuities.

Inflation is making its way towards positive territory, but not very fast. The February CPI increased 0.5% over January’s number. That puts cumulative inflation at -4.1% since October.

This is the lowest rate of inflation in almost 40 years. Only five times since 1970 has there been a CPI swing of more than 4% in the space of five months. And this is the first time that large of a swing has been negative. Check out MOAA’s month-by-month COLA track comparison for the last three years.

If inflation is negative or flat for the entire fiscal year, there would be no COLA for retired pay or Social Security.

It is almost unheard of, not to see a pay raise, food costs are not coming down, they are still sky high and rising in many cases, for meat, potatoes, even noodles, the power companies are getting approvals to build new nuclear facilities and the state has approved a 35% increase to be phased in over the next few years here in SC, the costs of living are going up, even if for some reason they are not being seen in the CPI, in real life there is more money going out to pay normal living expenses, what am I supposed to do turn off my air conditioner for the summer? Quit feeding the grand kids? I am not happy about this, but we all may have to tighten our belts in the next year, deflation is hard........

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