TMC: Inflation:
"I still wonder if our inflation bean counters in Wash. DC have ever taken downsizing into their calculations for certain food items."
I figured I'd take that comment as an excuse to repost this from last year.
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GOVERNMENT NUMBERS: INFLATION:
Of course, as you know (and I hope to God everyone knows), government numbers are the joke of the century!
All anyone has to do is look at inflation to see exactly how the game is played.
They report inflation as this benign number (2% or whatever nonsense). It is so ridiculous, they must think we are morons to buy it. Considering almost all of our major expenses have been rising at overwhelmingly faster rates, anyone knows (even if they haven't done the math) that inflation is much, much greater than that.
I would agree with the 2-3% number if inflation were only a function of say, computers and dirt. But, what about housing in the past 5 years!!!!!!!! What about food? What about health care? What about tuition? What about energy? These are our biggest expenses. The government wants to throw all that (or much of that) out and come up with some "core inflation" number so as to appear to be keeping inflation under control.
One of the tricks they employ is substitution. They argue that if something goes up, you will substitute something else that is cheaper, so inflation should be a function of what you ended up spending your money on. Even using that philosophy, the numbers are absurd. But, let's say you do buy their argument. What it leaves out is that every time you substitute something cheaper, your standard of living decreases. If, in order to afford a college education, you go to Leroy Tech instead of Harvard, maybe you DIDN'T pay more money for a college education, but the quality of your life is reduced BECAUSE of inflation. If you buy hamburger instead of steak, maybe you DIDN'T pay more for food, but the quality of your food will be less. If you drive a motorcycle instead of a car so as to pay the same amount for gasoline, the quality of life sucks when it is hot, cold, raining, etc as compared to when you used to be able to afford a car. If you move to the hood so as to be able to afford a 3 BR house, maybe you don't pay more for housing, but your comfort level has grossly deteriorated. Maybe because drugs have become too expensive, you abstain from buying them and suffer in pain. Walah, inflation is under control!
Needless to say, even if you accept the methodology that they employ - and even if, by accepting it, you could somehow come up with 2-3% inflation, it totally ignores the standard of living issue. The simple facts are that BECAUSE of inflation, the quality of life diminishes - no matter how you figure it! If you buy the same products, you have to sacrifice other things you would enjoy. If you don't buy the same products, you are sacrificing those things you may need for security or comfort... or even survival.
The same is true of all government numbers. They are grossly manipulated. In most other cases, we can't so easily see how wrong they are as we can in the case of inflation. But rest assured, they tell you what they WANT you to HEAR!
Moral of the story... anybody who trusts the government for ANYTHING is deluding themselves.
Len
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