Friday, October 30, 2009

Dave Ramsey's latest lie

Dave Ramsey's latest newsletter had an outright lie, and he should be called out on this:
Washington recently announced that, for the first time since 1975, there will be no cost-of-living adjustment for more than 50 million Social Security recipients in 2010. This is just another sign that the system is mathematically doomed and shouldn't be counted on to fund you at retirement. [My emphasis]

The second sentence is just plain not true, and I'm sure Dave knows this. When there is no (or very low) inflation, there should be no inflation adjustment!

As the Social Security Administration's website states quite clearly:
Because there is no increase in the CPI-W from the third quarter of 2008 through the third quarter of 2009, there is no COLA.

In other words, this has absolutely nothing to do with the solvency, or lack thereof, of Social Security.