Skip to comments.How and Why the CPI Was Destroyed as an Accurate Measure of Price Inflation
Posted on 07/25/2014 3:11:11 PM PDT by george76
In the early-1990s, political Washington moved to change the nature of the CPI. The contention was that the CPI overstated inflation (it did not allow substitution of less-expensive hamburger for more-expensive steak). Both sides of the aisle and the financial media touted the benefits of a more-accurate CPI, one that would allow the substitution of goods and services.
The plan was to reduce cost of living adjustments for government payments to Social Security recipients, etc. The cuts in reported inflation were an effort to reduce the federal deficit without anyone in Congress having to do the politically impossible: to vote against Social Security. The inflation-calculation changes had the further benefit to government fiscal conditions of pushing taxpayers artificially into higher tax brackets, thus increasing tax revenues. The changes afoot were publicized, albeit under the cover of academic theories. Few in the public paid any attention.
By lowering the official inflation rate, such changes promised to reduce the annual cost-of-living adjustments for Social Security and other federal programs.
The drive here was as to get a lower inflation reading, irrespective of whether the data were more-accurate.
(Excerpt) Read more at economicpolicyjournal.com ...
And the irony is that hamburger is now as expensive as was steak. Then you can throw gasoline on the fire ...
Wait until they introduce Soylent Green as a substitute for hamburger.
And, now, I believe, the CPI excludes such unnecessary
volatile expenditures such as food and energy, so we now measure CPI on items that we may purchase every three to five years, and exclude 2/3rds of your wallet.
Shadowstats is the Ron Paul goofball TEOTWAWKI website.
A better, more accurate effort can be found at: http://bpp.mit.edu/usa/
Soylent Red - it’s made out of Tea Partiers!!!!!
At the end of March, I posted an article about the average food price in the US being up 22% for the year.
Seriously? Is Ron Paul behind all this? Please say it isn’t so . . . I always people stumbled-upon the “info” on a website that sells gold.
LOL! I have tried to explain to people this trick...they just think I am crazy because I even know what the CPI is....amazing...they could care less that math tricks are used to trick them....
It is no wonder that con artists can so easily take folks for all they have....
Very interesting: Carefully considered and calculated models and figures that completely miss the economic situation for the average family.
Not sure if he is behind it, but his nattering nabobs of negativity pull the shadowstats website like a gunslinger pulls his smokewagon.
Maybe their eyes glaze-over because they realize that you don’t know what the heck you’re talking about? Mine would.
I do envy John Williams for one thing: he (probably) makes good money selling this compost.
wow? What happened to you? I am well aware of CPI..
maybe you need to go kick a dog? Years ago, you were a pretty cool FREEPer...
no need to reply, over ya!
Just go ahead and read the link I provided in #7.
Didn't they do the same thing under Carter? I seem to recall that then they excluded food, energy and housing from the CPI.
No kidding. An average pot roast cost $13 here inn my part of Georgia.
Price Index for Meats, Poultry, Fish & Eggs Rockets to All-Time High.
In January 1967, when the BLS started tracking this measure, the index for meats, poultry, fish, and eggs was 38.1. -— in May, it climbed to a record 252.832.
The CPI is a joke. They do crap like substitute even cheaper products that are not practically comparable and claim a savings. For instance: One year they may use Jiff Peanut Butter, but the next year they use a store brand that is not comparable in quality, then claim a price savings to offset the fact that Jiff went up 25% in cost.
If they bought one brand and compared it to the average cost the follow year, say best price over the same 30 day period, they would find inflation is significant.
Food, Fuel, Medical Insurance, Furniture, School Supplies, Education, Clothing, etc, are all up significantly.
and the Price of Electricity Hit Record for May.
It’s an accurate measure for those who don’t eat or drive or consume electricity.
I wish there was someone who calculated CPI the old way, so we could see the difference.
IOW all those dead voters.
Yet another example of how to lie with statistics.
The pathetic thing is that, despite banging our collective heads against the wall in frustration for decades & preaching just THAT, now that ANOTHER report is out about the truth...
...it won’t change a thing.
Government Work-Camp: Arbeitsziehungslager
All a Front Man for the East India Company