I’ve recently revisited a site I hadn’t bothered with for quite some time. Not that I don’t believe it has excellent information, it does. I probably got frustrated about the inability to get to the subscription information. At any rate, it’s a treasure trove of information and economic concepts. The site is….
John Williams’ Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
I don’t recall the circumstances which led me back there, but, I’m glad it happened. It reminded me of a post I’ve been meaning to write, but the concept can be a bit tricky to express. Lo and behold, I don’t have to do all that work! John Williams already has.
Many people may not know or recall this, but the US federal govt has been tweaking with the way they figure inflation. It’s quite a bit different than when they figured it in the days of Jimmy Carter. I won’t reproduce William’s thought in their entirety, but I’ll post his highlights…….
Consumer Price Index Has Been Reconfigured Since Early-1980s
So As to Understate Inflation versus Common Experience
- CPI no longer measures the cost of maintaining a constant standard of living.
- CPI no longer measures full inflation for out-of-pocket expenditure.
- With the misused cover of academic theory, politicians forced significant underreporting of official inflation, so as to cut annual cost-of-living adjustments to Social Security, etc.
- Use of the CPI to adjust retirement benefits, private income or to set investment goals impairs the ability of retirees, income earners and investors to stay ahead of inflation.
- Understated inflation used in estimating inflation-adjusted growth has created the illusion of recovery in reported GDP.
If you’re not familiar with this occurrence, I highly recommend reading his comments in their entirety. He goes through some good detail so people can understand what’s happened. So, the question remains, what does the real US inflation look like? If we figured it like we did prior to 1980, here’s what it would be, from Williams’ site.
We should print more money to catch up with this loss!!!