Hey, leftist trolls, inflation IS A TAX!

[pinqy]

Yeah, except food and energy are included: Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U. S. City Average, by expenditure category and commodity and service group

Not really, they are "adjusted" per the 1982 and 1991 recalculations of the CPI.

I just linked to the actual news release which shows in black and white that food and energy are included yet you deny it? And you show a chart that doesn't actually support your claim about food and energy. Seriously?

Shadowstats claims are ridiculous and he's made false statements about BLS methodology.

Read and learn: FAQ version
Full rebuttal

Also, here's the BLS Handbook of Methods detailing CPI methodology. Where's Shadowstat's documentation on methodology?

And further, BLS looked at what the effect was of the most recent change in methodology and found that yes, the new methods showed lower inflation, but nowhere near the amount Williams claims: http://www.bls.gov/opub/mlr/1999/06/art4full.pdf

 

[Nosmo King]

Well then it's a darn good thing inflation is so low.

Thanks for the laugh. the dollar is worth 40% less than it was 10 years ago and wages are stagnate. Yeah, good job federal reserve. Really "low" inflation, indeed!

Where do these trolls come from?

wait a minute! Wages are stagnant?!? Why it was just reported that the richest 1% saw a tripling of their income! And since that 1% is untouchable vis-a-vis taxes...

 

[pinqy]

Now, for a real alternative to the CPI, the MIT Billion Prices Project is a good alternative. They cover internet prices on a continual basis while BLS goes to establishments (and some online) once a month. The main difference is that MIT cannot price services, only goods. They also don't include sales tax, while BLS does.

MIT's index does show some higher inflation than BLS, but not near as much as shadowstats claims.

 

[Bill O'Olberman]

Do you dispute that inflation erodes savings?

Thats why is stupid to have your money just sitting there not accruing interest. There are many different options out there for you to invest your money so your money makes money for you.

Inflation isnt undesirable as long as it doesnt out pace growth in real wages. Also it makes borrowing more desirable. Why would I want to take out a 30 year mortgage of 160K at a 5% interest rate and end up paying like 260K if the value of the dollar stays the same?

 

[Uncensored2008]

No, I don't think that's right.

What you mean is that you're so partisan you will deny the obvious.

Wages also tend to track inflation, so the purchasing power of the average consumer only declines in a transitory manner.

I will grant you this, the purchasing power of the average consumer hasn't declined at all in the last 60 years, it has continuously risen.

That doesn't alter the fact that inflation affects the lowest economic segment disproportionally.

People who have significant savings, on the other hand, see the value of that savings er

Unlikely, unless we are talking a literal savings account. Most invest in 401K or IRA accounts, that are invested in money market or other vehicles that protect savings from erosion.

The lower segments of society have no savings and depend on a paycheck.

Food and energy are not "removed from the inflation calculation". They are not part of the core inflation which attempts to measure broad trends because they are both (1) volatile and (2) a significant portion of the basket.

The CPI calculation was radically changed in 1982, then again in 1991 to mask the effect of energy and food inflation. The pre-82 calculations reveal that inflation is very high. The fact is that $1 today has the purchasing power of $.90 a year ago. Smoke and mirrors in the CPI calculation don't change this basic fact.

 

[8537]

No, I don't think that's right.

What you mean is that you're so partisan you will deny the obvious.

No, what I mean is that you were wrong.

Wages also tend to track inflation, so the purchasing power of the average consumer only declines in a transitory manner.

I will grant you this, the purchasing power of the average consumer hasn't declined at all in the last 60 years, it has continuously risen.

Indeed.

That doesn't alter the fact that inflation affects the lowest economic segment disproportionally.

Actually, yes it does. People who earn the least see their wages and prices increase at a similar rate, and they save nothing. So inflation has minimal impact.

People in the middle see wages and prices increase at a similar rate and save a little. That savings is eroded by inflation.

People in high income categories save the most and therefore see inflation erode their savings the most.

Unlikely, unless we are talking a literal savings account. Most invest in 401K or IRA accounts, that are invested in money market or other vehicles that protect savings from erosion.

So what you're saying is that if I put my money in the market in, say, 2000 it would have kept up with inflation? How about real estate.

The CPI calculation was radically changed in 1982, then again in 1991 to mask the effect of energy and food inflation. The pre-82 calculations reveal that inflation is very high. The fact is that $1 today has the purchasing power of $.90 a year ago. Smoke and mirrors in the CPI calculation don't change this basic fact.

The changes were not radical by any means. They simply created a different manner by which to calculate technology changes, substitution effects and the basket of goods being calculated.

 

[Uncensored2008]

No, what I mean is that you were wrong.




Indeed.



Actually, yes it does. People who earn the least see their wages and prices increase at a similar rate, and they save nothing. So inflation has minimal impact.

That is utter nonsense.

Not only has minimum wage not kept pace with inflation, the lower segments of the labor pool have seen hours dramatically cut, seriously eroding income.

People in the middle see wages and prices increase at a similar rate and save a little. That savings is eroded by inflation.

Utter nonsense.

The middle generally has real property and investments in stocks and bonds, which protect wealth from the ravages of inflation. Most property values have rebounded to 2004, pre-bubble levels at this point.

People in high income categories save the most and therefore see inflation erode their savings the most.

Yeah, i noticed the Shitter revolution bemoaning the loss of wealth by the top 1%

So what you're saying is that if I put my money in the market in, say, 2000 it would have kept up with inflation? How about real estate.

Real estate yes, the DOW, maybe. Some areas have been savaged, others have done spectacularly. Investment in commodities such as gold and oil are off the chart. Investments in "green" will leave you bankrupt, as always, the market is a gamble, but watching and avoiding what Obama promotes is a wise idea.

The changes were not radical by any means. They simply created a different manner by which to calculate technology changes, substitution effects and the basket of goods being calculated.

When one calculation returns a 4% inflation rate and the other a 9.6% - I'd call that radical. Particularly since the cash flowing out of the consumer's pocket matches the higher number.

 

[pinqy]

The CPI calculation was radically changed in 1982, then again in 1991 to mask the effect of energy and food inflation.

How, exactly? What were the exact methodological changes you're claiming that "mask" food and energy inflation? They're not treated any different than any other good. Only housing was radically changed to eliminate the investment portion of buying a house.

And what exactly is your argument that the previous methods were better? They overstated inflation. A Laspeyres index always gives the upper bound of inflation (overstating actual inflation). The switch to a geo-means index at lower levels gives a more accurate view.

 

[8537]

That is utter nonsense.

Not only has minimum wage not kept pace with inflation, the lower segments of the labor pool have seen hours dramatically cut, seriously eroding income.

Real minimum wage is higher now than it was in 1986, 1996 or 2006.

Utter nonsense.

The middle generally has real property and investments in stocks and bonds, which protect wealth from the ravages of inflation. Most property values have rebounded to 2004, pre-bubble levels at this point.

Well at least you admit that the real value of property (and stocks) is down.

Real estate yes, the DOW, maybe. S

The answers to those questions were "no" and "no". You don't get to make up facts.

When one calculation returns a 4% inflation rate and the other a 9.6% - I'd call that radical. Particularly since the cash flowing out of the consumer's pocket matches the higher number.

Why are you comparing apples and oranges? You said the CPI methodology changed radically. it didn't. So instead you ranted about how one measure is 4 while another is 9.6%.

 

[pinqy]

When one calculation returns a 4% inflation rate and the other a 9.6% - I'd call that radical. Particularly since the cash flowing out of the consumer's pocket matches the higher number.

What about when both BLS and MIT (who separately collect and analyze different data sets) are showing a 4% inflation rate and shadowstats, a for profit individual specializing in doom and gloom and who does not collect his own data shows 9.6 %?

Note too that Gallups's estimates of unemployement and, more importantly, underemployment match BLS's data much more closely than shadowstats.