Reply #63: "Chained CPI" - - - Here's how it works:

[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 fraudulent measure of inflation, "chained CPI".










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