Question

Policymakers link increases in Social Security and other benefits to inflation because:

a. they wish to ensure that the real value of these benefits is constant over time.
b. they hoping to get more people in the U.S. interested in topics like inflation.
c. are the Bureau of Labor Statistics lobbied to link benefits to inflation in the 1980s.
d. they cannot link benefits to the stock market because of the Great Recession.

Answer 1

Policymakers link Social Security to inflation to maintain the real value of benefits over time, as inflation can decrease buying power and cause wealth disparities.

Step-by-step explanation:

Policymakers link increases in Social Security and other benefits to inflation because they wish to ensure that the real value of these benefits is constant over time. This is done to address the issue of inflation reducing the buying power of fixed incomes, which can cause inequities and unintended redistributions of wealth, impacting groups such as retirees and renters differently.

For Social Security, this is achieved by annually adjusting benefits based on the Consumer Price Index, as mandated by the Social Security Indexing Act of 1972.