Bonnie Bear,
it just doesn't make any sense- how the feds can show average salary at $12 an hour, the average house cost soaring and claim inflation is under control just because people are now able to carry much larger debt from the low interest rates.
I think the day the national debt hit $4 trillion, something had to give. With interest payments becoming the third largest item on the federal budget and social security pay-outs irreversibly and automatically tied to any and every increase in inflation, something had to give. That something is truth in government statistics. Just change the "formula" or "basket of goods" used to gauge inflation and voila, lower inflation. Sort of like when commissioning a poll, one can always get whatever "number" one wants if the poll takers are clever enough.
Of course, it's for the greater good, as these lower numbers benefit nearly everyone: the government, politicians, taxpayers, investors, business, long range planners, borrowers, etc. It's a raw deal for folks on fixed income (ask grandma if prices have stayed nearly flat the last several years) and lenders. For some it's a wash or a net benefit because they're on both sides of the equation anyway.
The problem: it's like flying with an altimeter that always reads 1000 feet short once you've taken off, i.e., you think you're flying at 2000 feet, but you're really flying at 1000 feet! Everyone concludes everything is just fine when there's zero inflation, when in fact the economy is already heading well into a deflationary spiral.
Of course, this is just the paranoid in me speaking. Who are we to argue with the government's wisdom? :o) |
