Sad but true, the Government does everything it can to manipulate inflation numbers to seem lower than they really are. Unemployment numbers are manipulated too, but that's a whole new story.
For one thing, every time something is labeled "new" or "improved" it doesn't count in the inflation data. 2007 cars more expensive than 2006? Kellogg's slaps a label on a box of cereal saying "NOW with more fiber" and raises the price? Doesn't matter because in the Government's eyes it's comparing apples to oranges.
Then there's the "basket of goods" concept that (oversimplified) takes things everybody buys, mixes it with things only a few people buy, and averages down. And there's also a substitution principle which basically says that if one thing is too expensive, people will buy something else. If you can't afford steak you buy hamburger. However what can you substitute if you can't afford bread or gasoline? And housing costs are manipulated downwards by a fiction that assumes homeowners pay themselves rent!
The bottom line is that if inflation was still calculated like it was 30 years ago, Social Security checks would be something like 70% higher. Truth be told, that's probably why the numbers have to be cooked. So on one hand, I envy people who get Cost Of Living Adjustments, but on the other hand I know that they are getting screwed too (just not as bad as the rest of us).
Well, that's kind of depressing. It's entirely believable, though,
Yikes. Things are worse than I thought.
Also unbelievable. But I believe it too.
Commenting by HaloScan
