IDAHO, USA — More than 370,000 Idahoans receiving Social Security payments will benefit from the programs largest annual cost-of-living adjustment (COLA) at 8.7%, according to AARP Idaho State Director Lupe Wissel.
This is the largest COLA rate since 1981, according to the Bureau of Labor Statistics (BLS). COLA intends to keep up with inflation to prevent recipients from falling further behind the increasing cost of living.
Wissel estimates Social Security payments to Idahoans in 2023 will total $6.1 billion. This will stimulate the economy, Wissel said.
"New money to Idaho is always a good thing. So, in that respect they're correct," University of Idaho Clinical Associate Professor of Economics, Steven Peterson said. "It's important that we get inflation under control."
Peterson thinks it is a good thing Social Security adjusts their benefit payments to move with inflation. However, the 8.2% inflation rate over the past months concerns him for the longevity of government programs and the stability of our economy as a whole.
"There are indications by 2035 that the Social Security trust fund is going to be in serious trouble, by the number's I've seen," Peterson said. "Social Security taxes at that time will only cover 3/4 of the benefits being paid out. There is a long-term issue on how we are going to pay for these increased benefits."
Peterson does not expect program to collapse – however, just like our national debt – he suggest collection more taxes or cutting back on spending to balance out the budget.
"It's hard to pick one, cause neither is very popular," Peterson said. "I expect the worst that can happen is you might see a modest reduction in your stipend - in real terms."
The impacts of today's economic state have already been seen by Patrick Sheridan. He stopped by the Social Security Administration Office in Boise on Thursday to sign up for benefits in 2023.
"You can never complain about getting a few extra bucks, right?" Sheridan said.
However, COLA rate will not make up for what Sheridan is already losing.
"Some of our invests dropping close to $300,000 in four-month, six-month span. I don't think you ever anticipate that," Sheridan said. "Crushing people's 401k's and investments. So, it's not a pretty picture out there right now."
Most economists support the federal reserve increasing interest rates to cool off inflation, Peterson said. He suspects the consequence of controlling inflation will lead to a recession next year.
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