To: pater tenebrarum who wrote (58494 ) 1/17/2001 11:28:58 AM From: flatsville Read Replies (4) | Respond to Why we all bemoan this--First, it is being used to loot the American population. More than 100 million Americans are covered by cost-of-living adjustments in their wage contracts, and programs such as Social Security, Medicare, Unemployment Insurance, etc., which are supposed to protect them against inflation. EIR has calculated that BLS lying about the rate of inflation, in which the QAM plays a great role, has this year stolen between $278 and $328 billion from these Americans. But the BLS has still other weapons to "reduce" inflation. In the 1990s, the Senate Finance Committee established the Advisory Commission to Study the Consumer Price Index, which was staffed by people whose aim was to reduce the inflation rate further, through various shams and ruses. The Commission issued its final report on Dec. 4, 1996, calling for a series of changes which would lower the CPI by 1.1%. In January 1999, the BLS instituted one of these changes, called the "consumer substitution" change. This assumes that if prices rise, the consumer will strive to make a constant level of expenditures for a certain category of goods. So, if the price of one item goes up, the consumer will substitute another item, which is cheaper. This may not be at all what happens in reality; but, the BLS made an assumption, which pre-programs in that the consumer would not be paying more for certain categories of goods. A spokesman for the BLS told EIR on Sept. 11, 2000, that this assumption alone will permanently take 0.2% per year off the CPI rate. Again, this is not a new problem; in fact, it is older than I am (I’m 23). Our delay in correcting this problem has cost us hundreds of billions of dollars in the past, and threatens the economic solvency of our government in the future. The Boskin report tells us that, if left uncorrected, the current bias in the CPI would contribute about $148 billion to the deficit in 2006. Remarkably, in that year alone, the cost of the error would be so big that it would surpass all but three federal programs in size: Social Security, health care and defense. In that year, the mistake would cost us more than all of our spending on education, welfare and international affairs, combined. Between now and 2008, an overstated CPI would contribute more than a trillion dollars to the national debt. Just over 30% of all federal spending is indexed to the CPI. Therefore, not adjusting the CPI is another step toward an unsustainable buildup of our debt, toward a disaster for our entitlement programs and toward a continuation of a serious generational disparity in this nation. thirdmil.org
