Wednesday, January 12, 2011

The Government’s Cost of Living Lies

            The Government’s Cost of Living Lies

The cost of everything is rising but the government never reports in its phony baloney cost of living statistics increases in food, fuel, energy and other necessities that are driving our cost of living out of the stratosphere.   As the government continues to publish low cost of living increases, we are scratching our heads in bewilderment.   We intuitively understand that the government is lying. 
So what gives with the governments lies about the cost of living?  Well, the government has a vested interest in lying because preservation of raw and unaccountable power trumps “We the People” and their interests.  However, we need to understand how and when the government started distorting its cost of living statistics.
In an article by Martin Weiss for Moneyandmarkets.com titled “The Greatest Scam of All Time”, Weiss references the work of economist John Williams who does nothing but study and expose government financial lies.  Williams runs a highly technical economic website and newsletter (www.shadowstats.com) but many savvy analysts, like Weiss, shift through the stuff and reduce it to plain English.   Weiss states:
The first major push for inflation-distorting reform began with the Clinton Administration. Until then, the inflation measure was based on an essentially fixed basket of goods.
Example: The basket included an 8-ounce steak. And no matter what, they tracked the same steak through time.
The Clinton Administration, however, argued for a variable basket of goods. If the 8-ounce steak got to too expensive, they argued, the typical consumer would simply substitute hamburger. So the government should do the same.
That wouldn’t be a measure of the cost of living. It would be a measure of the cost of survival. Yet, according to Williams, a series of complex mathematical changes in how the Consumer Price Index is calculated — giving less weight to higher priced items — essentially achieves the same goal as the variable basket of goods.
Add that to a series of other distortions in the Consumer Price Index ... and you’ve got a measure that’s so far removed from reality, it’s a joke. Instead of the 3.8% announced last week, the true inflation rate could be well over 7%.
The biggest victims of this hoax: Anyone collecting Social Security benefits. According to Williams, if the Consumer Price Index were calculated today the same way it was during the Carter Administration, the payments would be 70% larger!
Source: http://www.moneyandmarkets.com/press.asp?rls_id=427&cat_id=6
The Bush Administration continued with Clinton’s policies to deceive Americans by supporting a Consumer Price Index (CPI) based on absolutely nothing except what the government wanted it to be.
Jarret Wollstein in an article titled “Towards Liberty” further clarifies the point:
According to official government statistics, the Consumer Price Index (CPI) – the mostly widely used measure of inflation – is running a very low 2.2% a year.
But if inflation is so low, why is the price of everything you buy going up so fast?
How do you reconcile 2% inflation with 10% to 20% annual increases in housing prices . . . 25% to 40% increases in heating bills during the past winter . . . and double-digit increases in the price of nearly everything you consume, from gasoline, to food, to movie tickets?
The simple answer is that the official inflation rate is virtually pure fiction, and has been for decades.
What we have is a situation of government induced inflation that is buried under a mountain of government lies.  Americans surely feel the severe impact of inflation because they understand that the cost of necessities that they buy, like food, fuel and healthcare, keep rising and have been rising for a longtime.
Americans are also paying a lot more for health care, another item not covered in the government lies or its consumer prices index.  According to the Employment Policies Institute, the cost of employer provided health care has risen an astounding 59% since 2000 (more on health care costs later).
The real culprit of rising prices is monetary inflation and government protectionist regulations that benefit corporate insiders.   Simply stated, inflation is the highest tax inflicted upon us.  Inflation is the direct result of obscene government spending that essentially reduces the value of our currency to that of fiat status and a banana boat republic.   Government is the driving force behind inflation, which is precisely why the government lies about it.   The government consciously and deliberately debases our currency with deficit spending and the non-stop running of government printing presses that churns out more and more worthless greenbacks.
What about your wages?  Where are they going?
John Williams of Shadow Stats reported in 9/09 that “Real Median Household Income in 2008 Fell Below 1973 Level”.
But you say that your wages have gone up to compensate for runaway inflation.   However, inflation always outpaces wage increases, which further erodes purchasing power.  How much you earn isn’t relevant at all – what matters is the basket of goods you can buy with your take home wages.    The American middle class is stuck in the pinchers of rising inflation and declining wages and this has been going on since the 1970’s when the U.S. government started engineering the impoverishment of the American middle class.  More horrifying, we are also being taxed into acute impoverishment as our tax burden keep rising while our real wages are heading south and the cost of everything is going up. 

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