America latest deficit reduction ponzi scheme : change how the CPI is calculated

Let's change yet again how we calculate economic indicators to cover the truth even more!

America's Latest Proposal To Deal With Its Insolvency And Pursue Stealth Dollar Devaluation: Change The CPI

Enter the revised CPI: "Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks."

And because nobody has an issue with the current artificial hedonic and otherwise adjustments to the CPI which always reflect a far lower increase in prices than what is actually happening, here comes the government with another idea to make inflation appear to be rising even slower: "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. Such a move is widely seen by economists as resulting in a slower rise in inflation.

And if would cut the deficit because you know... cut the CPI, and you cut the social security payments you have to make to keep up with inflation.

As one commenter said... America runs on BS.

Originally posted by Vitchilo
As one commenter said... America runs on BS.

That is the statement of the year, my friend, I can not wait to see what Bernanke has to say today at 2:00 about the health of the economy and if he is going to keep interest rates steady or if the fed can not longer afford to keep buying the debt.

Either way we may fall in a full blown depression or hight blown inflation if he does otherwise.

reply to post by Vitchilo


Business as usual.

It is far easier to simply change the metrics then actually address the problem. If the general public even hears about this plan it will pass unobstructed out thier other ear and be forgotten as soon as the next commercial tells them what they cannot live without.

Somewhat off topic, but I was reading in the last couple weeks that the personal debt load in Canada was now roughly 1.5 trillion dollars...the average 4 person family holding 146% debt/income ratio.

What shocked me the most was that there was no mention of this being insane...just the 'new' normal.

So they are essentially taking the math from the way they calculate unemployment and applying it here. Just pretend it doesn't exist and use the numbers that make everything look good.

Everything is being backward-engineered nowadays.

Come up with a solution, or stat, you want to achieve and change the method of how you achieve said solution.

Much like all the retroactive laws passed to protect the Telecoms during the FISA fiasco. Sure they broke the law, but pass some retroactive laws and SHAZAM! Problem solved. No laws were broken.

Same principle here. Your CPI calculation is showing massive problems? Change the formula.

Problem, what problem?

Indeed. If the numbers aren't there, change the numbers.

This is also a policy of the Obama administration. He knows full well that if he doesn't control the flow of economic information more tightly he won't win another term in office. He can't stop the flow of info, but he, Turbo Tax Timmy, and The Bernanke can sure manipulate in what form that info comes out.

Future presidents will love this too.

reply to post by Vitchilo


Gas prices rising leads to less driving which means lower inflation?

Seriously?

WTF is wrong with this country, it's like we are being lead by a bunch of buffoons without a clue!

For those wondering how CPI can in any way "save us money" .. programs like say Social Security are "adjusted for inflation" .. so lower CPI and you lower annual yields for SS to seniors ..

These asshats are crooks .. nothing less.