Real Life Inflation vs Government Inflation

[mikegg]

In 2003, 10 years ago, I paid 35 cents to take the bus. The cost is now $2.00.

The government issues the CPI which claims that inflation is less than 2% every year. Does CPI really tell the story of real life inflation?

Intuit collected data from mint.com which has spending data from millions of normal people. This is what they found from 2011 to 2013, a span of only 2 years.

I realize that each element in the graph is unique which is why I'm also asking you to post some examples of inflation in your own lives.

 

[brycejones]

Oh Jesus this again........there was a thread earlier using this same graphic and a shit load of reasons why it isn't a real measure of inflation.

 

[mikegg]

Oh Jesus this again........there was a thread earlier using this same graphic and a shit load of reasons why it isn't a real measure of inflation.

Not saying it is. It just shows cost increases in one area based on mint.com customer data.

That's why I asked for real life examples.

 

[actuarial]

Not saying it is. It just shows cost increases in one area based on mint.com customer data.

That's why I asked for real life examples.

No it doesn't. It shows spending increases. If I buy 1 chocolate bar this year, and 2 chocolate bars next year, has the cost of chocolate bars doubled?

 

[IBMer]

No it doesn't. It shows spending increases. If I buy 1 chocolate bar this year, and 2 chocolate bars next year, has the cost of chocolate bars doubled?

Not to mention somethings go up in price, not because of inflation but because of other factors such as fuel costs....

 

[Genx87]

Not to mention somethings go up in price, not because of inflation but because of other factors such as fuel costs....

Huh? The cost of a good or services goes up is what we measure as inflation.

That said I dont think this graphic is very informative. It is a voluntary submission by a limited audience.

 

[boomerang]

The .gov keeps changing the criteria they use to calculate the CPI in order to keep the masses thinking the feds are doing a great job. It's all doublespeak. A meaningless number kept artificially low to assure your favorite cast of characters keep getting reelected. It's one facet of the "Bread and Circuses" method of governing.

 

[Cattlegod]

No it doesn't. It shows spending increases. If I buy 1 chocolate bar this year, and 2 chocolate bars next year, has the cost of chocolate bars doubled?

lmao - no kidding. This chart is a pile of misleading crap. 2011 to 2013 is a long time. I've added almost 50% onto my salary since 2011 and spending in that time as gone up by probably as much. I've been a mint user since before 2009 so I'm probably in that data.


not to mention it is misleading because it doesn't say how much the total buckets are. don't most people spend the most of their money on housing? notice it is down in that graph? the graph makes the assumption that all are roughly equal buckets of spend.

 

[michal1980]

No it doesn't. It shows spending increases. If I buy 1 chocolate bar this year, and 2 chocolate bars next year, has the cost of chocolate bars doubled?

Unless you can show that we are using 111% more health care in 2 years. Or kids are now taking part in 118% more activities, or taking 70% more college classes. Your theory of more consumption is mute.

The truth is inflation for real people is far higher then the government says.

 

[fskimospy]

Huh? The cost of a good or services goes up is what we measure as inflation.

That said I dont think this graphic is very informative. It is a voluntary submission by a limited audience.

There is an entire separate thread on why that graph is worthless as a measure of inflation, but all logical arguments aside you should just be able to look at it and see from a basic gut check how it fails. This is why friends don't let friends read Zerohedge.

Some people here are undoubtedly in college. Did your tuition bill nearly double from your freshman to junior year? Some people here have kids. Did the cost of a birthday at Chuck E Cheese (or whatever you crazy kids do these days) actually more than double over the last two birthdays? Does anyone actually believe that? Of course not. Any chart that measures what people are spending as a whole as opposed to what people are spending on a fixed set of items will never measure inflation.

I simply do not understand this continuing attempt by some to convince themselves that the CPI is a terrible conspiracy. The conservative economic model predicted huge inflation. It was wrong. Instead of wasting all this time and energy trying to show it was really right all along and there is some evil conspiracy, why not spend that time learning more about economics so that next time you'll be right? (not you, Genx)

 

[brycejones]

Unless you can show that we are using 111% more health care in 2 years. Or kids are now taking part in 118% more activities, or taking 70% more college classes. Your theory of more consumption is mute.

The truth is inflation for real people is far higher then the government says.

Good grief.....this measures what people reported they SPENT on categories in an online tool. Now during that time the number of people using that online tool has increased ergo the amount reported as spent in a given category is probably going to be substantially higher. Please for the love of god hop off the short bus. You've been proven wrong on this time and time again.

 

[dank69]

I find it hard to believe any bus ride cost $0.35 in 2003. I was throwing quarters away in 1992.

 

[Sonikku]

No it doesn't. It shows spending increases. If I buy 1 chocolate bar this year, and 2 chocolate bars next year, has the cost of chocolate bars doubled?

This. If anything Tuition/healthcare costs etc have probably remained flat. People are just spending more on it.

 

[michal1980]

Good grief.....this measures what people reported they SPENT on categories in an online tool. Now during that time the number of people using that online tool has increased ergo the amount reported as spent in a given category is probably going to be substantially higher. Please for the love of god hop off the short bus. You've been proven wrong on this time and time again.

good grief your not even on the bus.

 

[dank69]

good grief your not even on the bus.

Good insult you have there, telling someone they aren't on the short bus.

 

[gevorg]

its a well known fact that "official" CPI is a joke

 

[fskimospy]

its a well known fact that "official" CPI is a joke

Nope, it sure isn't. This has been debated a number of times on here. People who think the CPI is a joke don't know what they are talking about.

 

[zinfamous]

I find it hard to believe any bus ride cost $0.35 in 2003. I was throwing quarters away in 1992.

Maybe OP was in school at the time, and was paying a student's discounted fee for public transit? that's the only reasonable explanation--perhaps OP should mention these details?

The cost for me to ride the bus or train in Chicago was, in 2003 to ~2006, about $1.25. $1.50 total for up to 2 transfers (maximum needed transfers to get to anywhere in the city on CTA, one way).

By the time I moved away in 2008, the cost had "skyrocketed" to $1.75 total for up to 2 transfers.

 

[zinfamous]

good grief your not even on the bus.

So I take it you are on this bus?

:hmm:

 

[dank69]

So I take it you are on this bus?

:hmm:

Just more ammo backing my assertion that he is the outright dumbest poster on this forum. Which leads me to my newest hand crafted insult:

You are so dumb, you think telling people they aren't on the short bus implies they are stupid.

 

[gevorg]

People who think the CPI is a joke don't know what they are talking about.

People who can't see that the real inflation is well above manipulated CPI numbers are delusional. It is extremely desirable for the government to underestimate CPI since so many factors depend on it, like Social Security payouts and real GDP of the country. The fact that CPI is calculated by the government controlled department (Bureau of Labor Statistics) gives it a major conflict of interest.

 

[fskimospy]

People who can't see that the real inflation is well above manipulated CPI numbers are delusional. It is extremely desirable for the government to underestimate CPI since so many factors depend on it, like Social Security payouts and real GDP of the country. The fact that CPI is calculated by the government controlled department (Bureau of Labor Statistics) gives it a major conflict of interest.

People who can't accept transparently calculated statistics that track well with other independently generated results are delusional.

If the CPI is manipulated, explain this:

 

[ivwshane]

People who can't see that the real inflation is well above manipulated CPI numbers are delusional. It is extremely desirable for the government to underestimate CPI since so many factors depend on it, like Social Security payouts and real GDP of the country. The fact that CPI is calculated by the government controlled department (Bureau of Labor Statistics) gives it a major conflict of interest.

The only thing the BLS does is crunch the numbers, exactly what conflict of interest are you talking about?

These conspiracy nuts need to go back to the whole where they came from.

 

[gevorg]

The only thing the BLS does is crunch the numbers, exactly what conflict of interest are you talking about?

These conspiracy nuts need to go back to the whole where they came from.

The fact that statistics (or "crunching the numbers" in laymen terms) is run by the government entity, not some independent third party that doesn't have to pay Social Security.

Nice classic "argument", if you question the government, then you're a conspiracy nut.

 

[fskimospy]

The fact that statistics (or "crunching the numbers" in laymen terms) is run by the government entity, not some independent third party that doesn't have to pay Social Security.

Nice classic "argument", if you question the government, then you're a conspiracy nut.

Their method of calculation is 100% transparent.