"Chained CPI" - Here's how it works: (ie, "How to destroy your SS without any "cuts") :

[Faryn Balyncd]

Suppose, over the coarse of a few years, prices rise 100%.

And suppose you start out buying rib-eyes at $5/lb, and they rise to $10/lb.

As a means of coping with inflation, you quit buying rib-eyes and buy hot dogs, which have risen from $2/lb to $4/lb.

In this scenario, you might be tempted to think that "inflation" has been 100%, since prices of all items rose 100%.



But you would be wrong.

Government statisticians, using "chained CPI", billed as a "more accurate" measure of inflation by both Republican & Democratic co-chairmen of the Deficit Commission, because of it's ability to "capture" the "changes that people make in the composition of goods that they purchase over time, often in response to price changes", will interpret this quite differently: Because you, and other consumers have switched to hot dogs, "hot dogs are now the new rib-eye". Therefore, according to official U. S. government statistics, "inflation" will not be 100%, but, since consumers have substituted $4/lb hot dogs for the rib eyes they used to purchase at $5/lb, consumers have, in the government's eyes, seen a DEFLATION of 20% ! The fact that the prices on all items have risen 100% will become irrelevant to the calculation of Social Security COLA's.



So get ready for the future, seniors:

When hyper-inflation comes, your government intends to be armed with statistics that prove you are not only experiencing no inflation, but deflation.

Expect that COLA you got in 2008 to be your LAST.



The attack on your Social Security benefits will not have to involve anything labeled a "cut" in order to totally destroy the benefits you have funded with 40 years of payroll tax contributions.

There is a bi-partisan move afloat to let inflation destroy those benefits, and to destroy your COLA's by use of a perverse & fraudulent measure of inflation, "chained CPI".












:kick:

[Poboy]

1. Faryn Balyncd OPs are always worthy of a recommend.

Recommended.

[kentuck]

2. Very interesting.

I had not thought of inflation in that context. Makes sense.

[Poll_Blind]

3. Wow- you've gotten my attention. If you have any links to recent news stories...

...talking about this, I'm very interested in reading more. I had no idea such a thing existed.

PB

[Selatius]

4. They've done a bait-and-switch if that is the case, a fundamental betrayal of trust.

It used to be that the CPI was a measure of cost-of-living, but over the last twenty years, with numerous revisions to the data series, they've basically replaced the cost-of-living with simply the "cost-of-survival."

If we were recording inflation the way the Carter Administration were recording it, we're probably looking at a much higher rate of inflation than people are comfortable with. Witness, for example, the impact on shipping costs for food and other items that the rising gas prices are having, but they no longer count energy costs in calculating inflation.

[FiveGoodMen]

12. "fundamental betrayal of trust"

The US government in four words.

[BrklynLiberal]

5. Guess the repukes got it right: DIE YOUNG.

If you are already old: DIE NOW

[dkf]

6. COLA has been used only since 1974.

Prior to that increases were set legislatively.

I guess when social security was implemented with a retirement age higher than life expectancy they didn't think it would be so necessary to build in a cost of living increase since they didn't expect that to be very long.

http://www.ssa.gov/oact/cola/colaseries.html

[jimlup]

7. Cat food will be the new Ribeye...

They won't stop until we fight back and so far we are not.

[rfranklin]

9. Cat food is very expensive...

why has this become gospel?

[jimlup]

11. Oh sorry, I do have a cat too...

I know I spend about $8 a week on just her food. It scares me too. There was a recall of Kroger cat food, and one of the symptoms of ingestion: "Death" Fortunately, I don't buy her store brand, frankly she wouldn't stand for it! She'd turn her nose up big time.

[Mojorabbit]

13. Heck I picked up a medium sized package of stew meat

last week and it was 20 dollars! My jaw hit the floor. No way I will pay that amt. The price increases are amazing.

[unblock]

8. at the extreme, chained cpi doesn't measure prices AT ALL; it measures spending.

if you fail to keep the "basket of goods" constant, and adapts it completely to the "new" basket of goods purchased, well, if total spending is constant, it will look like there's zero inflation regardless of prices.

some adjustment in the basket of goods makes sense based on inventions and the innovation of technology. but it doesn't make sense to say, hey, you get more car for your money these days because they now have airbags and other features that cars didn't have years ago. that may be true, but it doesn't change the fact that the exact same transportation needs you had years ago now are more expensive because they require an airbag when they didn't decades ago.

[Faryn Balyncd]

10. You are on to something...Chained CPI is a tool that can allow infite possibilities for slashing....

....benefits simply by changing the requirements for when it is to be considered that a substitution has been made. And it allows the cutting of benefits to be redefined by re-defining what constitutes "inflation".

[defendandprotect]

14. Agree... and every $1 anyone had pre-Bush was worth .50 cents after Bush ...!!