There's an upside and a downside for investors regarding the Social Security Administration's recently announced no change in the Social Security benefit, for the second straight year.

The upside is that it will result in a smaller fund outlay than would have occurred had a cost of living adjustment occurred. (The adjustment is based on the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, third quarter to third quarter. Because there was no increase in the CPI-W, there is no cost of living adjustment.)

Federal law bars creditors from taking Social Security to recover a debt. Other deposits that are exempt include pensions, payments to disabled veterans and survivors' benefits for children.

Banks have been ignoring the law when it comes to garnishment orders. They freeze the accounts, then rip off people by charging them outrageous fees. First the account goes into deficit and there is a fee Then the account goes on hold and the customer cannot get access to his or her money. If the customer tries to use a debit card, it is rejected and another fee is added. Once the account is in deficit, the banks keep adding fees on and on ...

It's been overlooked -- it's received scant coverage by the popular press -- but it's worth repeating: one benefit of the health care reform legislation will be enhanced employee mobility.

Don't misunderstand: a bill that prohibits discrimination by insurance companies due to medical condition/history, provides substantial subsidies for those who don't have health insurance from their employer, and that also offers much-needed tax breaks for small businesses who do provide coverage, is a major accomplishment. It's big change and it's big news. If the health care reform bill passes, it would be the biggest social policy advance by the United States since the passage of Medicare in 1965, and it would rank third behind the latter and the establishment of Social Security in 1935 in terms of social safety net significance.

Good news! President Obama is calling for a $250 payment to seniors.

This news comes on the eve of an announcement by the Social Security Administration stating that there will be no "cost of living" this year. By law, increases in Social Security payments are tied to the cost of living, or COLA. Since there is no inflation this year, there will be no increase in Social Security benefits. This would be the first year since 1975 with no increase.

Attention seniors! You may not be receiving your cost of living adjustment (COLA) this year.

We must understand that the COLA increase is based on the Consumer Price Index (excluding food and energy) This is called the "Core CPI." The Core CPI, excluding volatile food and energy, actually rose 1.5% on an annual basis.

About 50 million retired and disabled Americans receive Social Security. Since 1975 Social Security payments have increased based on the cost of living adjustment.

Sometimes the most basic of problems -- ones where the solution is fairly simple -- linger for decades in Washington, primarily for protection of status quo reasons.

A good example is Social Security -- the huge, bedrock entitlement program, often portrayed as facing a dire circumstance, when, in fact, as former U.S. Labor Department Secretary and current Berkeley Professor Robert Reich pointed out, the solution is fairly basic.

How will President Obama's $825 billion plan to stimulate the economy work? It looks like it will create jobs for the people working on the projects. But how long will those jobs last and will they continue after the projects are over? And if there's something wrong with his plan, what would be a better alternative? I think that if these projects are investments that create revenue generating operations, they are worth doing -- especially if those revenues ultimately recoup the investment.

Here are some of the specific plan elements that I view as investments:

• Boost renewable energy supply. The plan seeks to double renewable energy generating capacity of over three years -- to power six million American homes. It would upgrade two million homes and 75% of all federal buildings to better protect against the heat and cold -- saving low-income homeowners $350 a year in utility costs and cutting government costs by $2 billion a year. It would also provide loan guarantees to boost the $100 billion in private sector investment in clean energy projects over three years.
• Upgrade 3,000 miles of transmission lines for a national electric grid to make more efficient use of energy.
• Build 1,300 waste-water projects which would provide an ongoing revenue source for cities and states and reduce the costs of cleaning up polluted water.

Welcome to Way Off Wall Street, a column dedicated to providing Main Street opinions on topics of interest to investors. Each installment highlights the views of Americans who are far removed from the canyons of Wall Street -- and who often see things more clearly as a result.

I've spent a good deal of time researching and soliciting opinions about how people are looking at their own retirement in relation to the American economic downturn. Many people are looking at retirement with the same mind-set that they've always had. In many cases, I found people believe that our economy will recover rather quickly. In others, I suspected they are intentionally blinding themselves from the truth that this could be a very long economic downturn.

Since today's retirement realities is such a big topic, I'm going to discuss it over two posts. This first one concerns the group of people who either have already retired, or expect to retire within the next five years. My next column will cover people who have more than five years until retirement, as well as those people who believe that the word "retirement" will never truly apply to them (I myself fall into the latter part of the second group).

Baby Boomers, in some cases already facing the 'double demands' of caring for kids and aging parents, have another economic concern, at least for the next phase of the housing cycle: substantially lower household net worth, as a result of declining home prices, so says a Washington-based think tank.

The Center for Economic and Policy Research says the median households head by those ages 45-54 in 2009 will have about 25% less wealth than the similar demographic in 2004. In dollars, household wealth will decline to $113,268 from $150,113.

Further, the above assume March 2008's housing prices hold for 2009: if they don't and prices fall another 10%, household net worth declines by about 35%; 20%, by about 45%, the CEPR said.

Economist Peter Dawson, who is not affiliated with the CEPR or the study, told BloggingStocks part of the problem was "unreasonable expectations regarding home appreciation rates, the belief that 10-15% real estate gains would continue for decades. It got too many adults out of the traditional saving and investing mode and into thinking their home would serve as a major return on investment." Most homes do appreciate, and they can help build wealth, Dawson said, but homeowners must think in terms of a 6-9% average, annual appreciation rate, "which is a more-realistic return for residential dwellings."

With a sluggish economy, uncertain job growth, the most serious housing recession in more than 20 years, record oil and gasoline prices, ramping food costs, and a foreign policy landscape that's challenging (to say the least), decision makers in the United States, public and private, have more than enough to be concerned about, near-term, most analysts and citizens would agree.

Still, the above wasn't enough to prevent the annual "alarm sounding" about long-term concerns, such as Social Security and Medicare, the likes of which occurred again this week when the Social Security Trustees released their revised 2008 actuarial balance, which is a status report.

Moreover, while it's never prudent to ignore the tax and benefits implications of entitlement programs as large as Social Security and Medicare, it's important that investors and taxpayers also keep in mind one undeniable reality pertaining to statistical analysis of this sort. Namely, that we're dealing with longitudinal projections stretching out decades in which -- if any one of 20 variables (or more) change -- receipts and outlays would change substantially.

While it comes as no surprise, both Medicare and Social Security are financial disasters waiting to happen. In a report issued today by trustees of these two large government programs, while the dates of bankruptcy are unchanged, the date of the programs being cash flow negative have moved up to a date closer than was previously thought.

According to an AP report: " The first year that payments will exceed income for Social Security will occur in 2017, just nine years from now, reflecting growing demands from the retirement of 78 million baby boomers. Medicare is projected to pay out more than it receives in income starting this year.

"The financial difficulties facing Social Security and Medicare pose enormous challenges," the trustees said in their report. "The sooner these challenges are addressed, the more varied and less disruptive their solutions can be."

Long hailed by free market economists as the model for how to create a pension system, news out of Chile that it plans on making payouts to low income seniors, has government interventionists jumping for joy.

The AP writes:

The new $2 billion-a-year program will expand public pensions to groups left out by private pensions - the poor and self-employed, housewives, street vendors and farmers who saved little for retirement - granting about a quarter of the nation's work force public pensions by 2012.

The fact is that this move is the way that governments should generally function. Stay out of things unless there is a real need to do something. No one is of the opinion that low income seniors should be thrown out into the street. Of course they should be helped. I would rather see the community take care of them and set up a network of charity, but if that doesn't work, then the government should step in.

What government interventionists miss is just how successful the 1981 pension reform has been.

In an excellent column for Forbes, Ken Kam explains what's really wrong with Social Security. Forget the politics and the debate about its future solvency -- Kam explains it this way: When his daughter was born, he realized that if he could invest $2 thousand for her each year of her life and grow it at 11% a year (An aggressive target, but we'll go with it), that money would have grown to $1 million by her 40th birthday -- and $30 million by her seventieth!

What does that have to do with Social Security? Most people put in more than $2 thousand per year -- a lot more. And yet Social Security will never provide them with anything like that kind of a nest egg.

Albert Einstein is widely quoted as having said that compound interest is the most important mathematical discovery of all-time -- or words to that effect. And yet our federally mandated retirement system fails to take advantage of it, instead opting for what amounts to an elaborate Ponzi scheme, sustainable only by the rule of law and population growth.

Mr. Kam talks about his idea for a "Bicycle Trust" as a way to "assist our children in their efforts to become self-sufficient, valuable members of society. Just as a bicycle enables you to travel farther and faster than being on foot, our trust should amplify our children's own efforts to develop their abilities so they can go farther and faster than they otherwise would have."

There's a link to more information in the column, and it's certainly worth checking out.

In the weeks ahead, BloggingStocks will take an in-depth look at the U.S. dollar's decline, its impact on the global and U.S. economies, as well as on job creation, trade, and investment.

Remonstrations about the weak U.S. dollar are getting to be a little bit like what Mark Twain said about the weather:

"Everyone seems to complain about the weather, but no one ever seems to be able to do anything about it," Twain said.

Similarly, everyone seems to complain about the weak U.S. dollar, but no one ever seems to be able to do anything about it.

This time it was former U.S. Treasury Secretary Robert Rubin, who Tuesday told Bloomberg News that relying on a falling currency to increase exports isn't a "sound approach" and said policies should be implemented to strengthen the dollar.

In a New York Times column dripping with sarcasm, the brilliant Ben Stein wonders whether we should give top hedge fund managers some taxpayer dollars to manage:

Supposedly, a number of wizard managers consistently earn more than 40 percent a year for their hedge funds. Yes, I know that this conflicts with every bit of investment and market theory -- or almost every bit. I know that such a thing should be impossible. But, supposedly, magicians like Steven A. Cohen, founder of SAC Capital in Stamford, Conn., can regularly earn 40 percent a year -- often more -- on their capital.

But why waste our time on envy or disbelief? Let's put Mr. Cohen to work for the greater good. Let's have the federal government issue about $10 trillion in Steven A. Cohen National Debt Retirement Fund Bonds. After interest is paid on the bonds, if Mr. Cohen makes 40 percent on the money, the fund will return 36 percent a year. That means that in only two years, he will have made roughly $10 trillion for the taxpayers, with which he can pay off the entire United States federal debt.