Government Considering Changing How CPI Is Calculated
What do you do when inflation gets in the way of policies? Well you change how we define inflation of course! As long as the CPI number is in good standing, nobody can argue that inflation is here! Forget $10/gallon gasoline, we have a flat CPI! (sarcasm)
If it weren’t so serious, it’d be funny, but this is exactly what is being considered by our great leaders in DC.
An article from Zero Hedge discusses the considerations over changing the CPI formula. Here is an excerpt:
“Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks.”
What does this mean practically? SImply said, the worst of all worlds for the US middle class: “[the proposal] would likely lead to both lower benefits paid to seniors and higher taxes paid by most people who pay federal income tax.” We expect this last-ditch accounting gimmick will be implemented shortly, and the broader American population will not care one bit that it’s purchasing power will see a step function drop yet again in the ongoing crusade to destroy the dollar.
An artificially lower CPI also gives the Fed more room to print money since they cite CPI figures as inflation indicators and these can prevent the Fed from printing more.