Thursday, March 1, 2012

Real Inflation 'Up Some 8%'

From CBS Money Watch:
Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.

The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products.

The institute contends that to get a good read on inflation's "sticker shock" effect, you must look at the cost of goods that the average household buys at least once a month and factor in only the kinds of expenses that are subject to change. That, too, eliminates the cost of housing because when you finance your home with a fixed-rate mortgage, that expense remains constant until you refinance or move.
This is part of the shell game the Federal government plays with us.They measure inflation through purchases we may make once every few years,or as in the case of home purchases,maybe once in a lifetime.This is not only crazy,but also deceitful.

The reason for this deceit is all for the purpose of trying to keep our out of control Federal budget in the same universe as we are in.If our government used an honest method to measure inflation,entitlement spending would go through the roof,because entitlement spending is tied directly to the rate of inflation.