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Government Considering Changing How CPI Is Calculated

22 June 2011 16 Comments

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.

Got gold?


  • @NoDebtMBA said:

    I'd argue for international stocks instead of gold, but as a saver Congress and the Fed's continued policy of devaluating the dollar pisses me off.

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  • 20smoney said:

    Maybe the government will decide to recalculate how you determine what an ounce of gold is therefore they can suppress it's "price" and show people that their cash is still worth more than it is!

  • Bowmanave said:

    Do any ordinary people pay any attention to this anymore? Or anything the government says? Most folks I know assume it's mostly lies, or entirely fabrication.

  • Panama foundation said:

    Now the Australian people saw right through this on Election Day they knew the Howard Government wasn t telling them the truth and they knew Labor was going to bring a fair and balanced workplace relations system to this country which was all about productivity and all about making sure that we were fighting inflation that s what Labor is going to do. This Treasury minute has obviously been in the possession of Howard Government Ministers members of staff and given to newspapers as part of a desperate plan to distract from the fact that the Howard Government has left this nation with an inflation challenge which we are dealing with by investing in skills and of course by making sure next weeks budget is a responsible one…REPORTER Has there been differing advice since the policies your policies actually did come out? So if you are more productive in your enterprise then there are sustainable gains to be shared and those gains don t feed into inflation.

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  • Mike Huber said:

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  • Jobs in the Gulf said:

    A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households. The CPI is defined by the United States Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

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  • Aaron DelSignore said:

    It is very interesting that CPI was designed to help businesses, individuals and the government adjust their financial planning and considerations for the impact of inflation. The CPI worked reasonably well for those purposes into the early-1980s. In recent decades, and with the crisis the government decided to make some changes in the CPI formula, but can this change reestablish the economy?

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  • sas research said:

    I don't think it really can take place in our country. Totally not now. It is just attempts to make an impression on people, nothing more