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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (19008)	3/30/2004 11:49:44 AM
From: Tradelite	Read Replies (2) \| Respond to of 306849

Mike, if the CPI and PPI are rigged by design and by govermment policy to understate inflation, there probably are many individuals and businesses saving a bunch of money because of it--not just the government. Obviously this might have some stimulative effects on the economy, but wouldn't there also be a downside that the government would want to avoid? An example of this downside might involve CPI-indexed escalator clauses in commercial and residential rents. When landlords can't raise rents, they make less profit, hire fewer employees, and pay less tax--Definitely not stimulative and a drain on federal tax receipts. Many pensions are also indexed to the CPI, but if retirees aren't paying as much income tax on pension money, where does the government gain here by understating inflation? It's possible the issues are more complex than simply a case of the governmment lying to people. Hard for me to subscribe to that theory when it comes to labor statistics. However, I do believe like you that the government can and has lied to the public on many occasions in an effort to "control" public opinion, spin its policies in a particular light, head off violent reactions to certain information about key issues such as national defense, etc.