Chained cpi and real inflation numbers explained - Obama proposes linking SS to chained cpiSubmitted by Ian56 on Thu, 12/20/2012 - 15:32
Barack Obama is proposing that the rate paid for Social Security benefits will be dependent on chained cpi, not cpi in the future.
It is another sellout of the poor and middle classes in favor of Corporations and the wealthy.
Investopedia explains 'Chain Weighted CPI'
The chain weighted CPI incorporates changes in both the quantities and prices of products.
The product has been changed from clothing to food to more clearly demonstrate the changes proposed.
10 years ago I bought steak 5 times a month and ground beef once a month (I felt well off).
Steak cost $5 and ground beef $2. Total cost per month $27
Now I am feeling hard up and I only buy steak once a month and I buy ground beef 5 times a month.
Steak now costs $10 and ground beef now costs $4. Total cost $30.
The price of food has doubled over the last 10 years - cpi would be 100% (cumultative over 10 years).
Chained cpi is just over 10% (over 10 years).
Read the original example http://www.investopedia.com/terms/c/chain-linked-cpi.asp#ixz...
It would seem that both Barack Obama and Nancy Pelosi expect ordinary Americans to be impoverished for a very long time.
Chained cpi is higher than cpi when times are good as people are able to purchase more and better quality goods.
When times are hard the opposite is true.
Disposable incomes for all but the wealthy have been falling for many years.
The amount left after paying for basic necessities - food, shelter, warmth, basic clothes has been decreasing.
Chained cpi is a method of squeezing the poor and the middle classes still further. A great many people are struggling to cope now.
All sorts of things are affected by official government inflation statistics :-
Social security payouts
Food Stamp payouts
Government employee wages
Private sector wage settlements are in large part determined by official inflation numbers
Real inflation (cpi) calculated using the methods employed in 1980 is 10%.
The official model of measuring cpi was changed in the early 1980's.
CPI using the models in place in 1990 is 6%. The official cpi calculations were again changed in the early 1990's.
The basic necessities of food, energy and housing are greatly understated for the overwhelming majority of people in current official cpi statistics.
Chained cpi is another back door method of reducing official government inflation.
1980 model cpi compared to current
1990 model cpi compared to current
Above charts courtesy of http://www.shadowstats.com/