Redefining inflation to keep COLAs low

[kranky]

http://www.nasdaq.com/aspx/stock-ma...urement-on-table-as-part-of-budget-talksaides

"According to congressional aides familiar with the discussions, the proposal would shift how the Consumer Price Index is calculated to reflect how people tend to change spending patterns when prices increase. For example, consumers tend to drive less when gas prices increase dramatically."

So if butter goes up to $10 a pound, and people end up buying margarine made from mud for $1 a pound, there's no inflation?

 

[Attic]

Interesting and I see a good future for this type of CPI adjustment if it were not to be lobbied and corrupted, which I believe it certainly would be.

I think anyone in the middle class and certainly the lower middle class is feeling the affects of price increases on food and gas. This group of people should not be punished further by government trickery that attempts to negate the affect of the increased cost of living in order to pursue a roundabout fix to current and future economic concerns.

Really what this comes down to is the governemnt trying use mirrors to hide inflation and it appears once again the government is putting their needs/desires ahead of the people. Anyone surprised?

Overall it feels like another cheap trick by politicians who don't have the stones to face problems head on.

 

[Infohawk]

Overall it feels like another cheap trick by politicians who don't have the stones to face problems head on.

Yeah, I'm very suspicious of the government trying to change this right now.

Almost more important than what specific technique they use to measure it is how the rate changes over time. I this particular economy, I want to be able to see how things compare to 5 or 10 years ago. I don't want to have to hear arguments about how different techniques were used and we can't compare the rates.

On the other hand if they want to reduce government payroll, that is more than fair in this economy but they should just have the stones to do it.

 

[wuliheron]

Great, more Orwellian double-speak for politicians and unscrupulous so-called news organizations to use. Inflation is down! (i.e.- nobody can afford to buy anything). Unemployment is down! (i.e.- their unemployment insurance ran out). Government is not the solution (vote republican).

 

[StrangerGuy]

Great, more Orwellian double-speak for politicians and unscrupulous so-called news organizations to use. Inflation is down! (i.e.- nobody can afford to buy anything). Unemployment is down! (i.e.- their unemployment insurance ran out). Government is not the solution (vote republican).

We went from mostly single income to double income households and we ended up financially worse and more neglected kids than before. But hey, at least women are happier with their new found "freedom", right?

 

[lupi]

These things have been adjusted for the last couplle of decades for the benefit of the goovernment and to screw the people, I see no reason why that trend should change now.

 

[Trianon]

I guess Biden lives by:

if you can't dazzle them with brillliance, baffle them (the masses) with bullshit"

 

[wuliheron]

We went from mostly single income to double income households and we ended up financially worse and more neglected kids than before. But hey, at least women are happier with their new found "freedom", right?

I guess you could argue that being paid closer to what men are for the same work and being able to force men to pay child support the pursuit of happiness.

 

[Trianon]

So if butter goes up to $10 a pound...account when it's with plus sign, not minus:)

 

[a777pilot]

Basically, the government lies.

Got it.

 

[PingSpike]

This of course makes no sense because consumer substitutions should automatically be built into the price. When some one substitutes rat milk margarine for butter they have reduced the demand for butter which should effect its price. Adding an additional control for this in the calculation is obviously just a complicated way of lying with statistics.

So in short, the government is doing is the same as always. I remember reading they already do this to some extent so it's just more of the same only harder and with less lube.

Up next we'll move the goal posts on what counts as employment so that coupon clipping counts as employment and the unemployment rate will plummet to -17%. It turns out unemployed people clip more coupons (because they have more time and less money) and therefore become magically employed.

 

[PingSpike]

We went from mostly single income to double income households and we ended up financially worse and more neglected kids than before. But hey, at least women are happier with their new found "freedom", right?

LOL, nope:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6395879.ece

 

[bfdd]

so that's how you win... why didn't anyone ever tell me you could just move the goal posts?