[valkyrieanne]

Factor in inflation and that is a loss of real wages. I don't know what the government is claiming inflation is now days (I consider their figures phony and pay little attention to them), but I keep very accurate records (for tax purposes, I'm self employed) and my base costs for living in Feb 2004 were slightly above 10 percent higher than Feb 2003. By basic costs, I mean the ones that are absolutely essential for my life as an American, i.e. Heat, Vehicle fuel, food, housing, clothing, vehicle repairs (I schedule the same basic maintenance every February, tune up, alignment, etc.), electricity, water, phone, etc.

Medical insurance costs have been going up 10-15% *per year.* Obviously it can't continue like that forever, but when so many people have to pay their own medical insurance (like self-employed people, or those laid off at age 50-55), that cost becomes a significant factor in the household budget.

[lelio]

Medical insurance costs have been going up 10-15% *per year.*

And so have housing prices (although rents are falling). How the government can claim we have sub 1% inflation is beyond me.

Well it isn't entirely beyond my non-economist brain: they perform trickery. Like saying that a family can switch from eating expensive beef to eating cheaper chicken as being an equal trade, and not a sign of increasing prices. Hey, they're still getting their calories, right?