The CPI Change is Purely Political


Here is a long and loaded question. If you learned that your President and Congress were about to cut Social Security spending by 11% over the next ten years, a $110 billion cut, as well as increase your taxes $180 billion, with the vast majority of that increase falling on the middle class and poor by increasing tax rates and lowering the Earned Income Tax Credit, how would you feel? Well, guess what? They're going to! And these two examples are only the most egregious and sneaky changes that they will be producing.

Now, being smart enough to be elected in the first place, your representatives are not going to increase your taxes or cut you or your parent's Social Security openly. That would be the kiss of death to any re-election hopes they might harbor.

But if they are going to, indeed, raise taxes and cut Social Security, how can that be done without actually voting on any measure with those programs involved? Why, it's as simple as adjusting one little government statistic; the Consumer Price Index (CPI).

The CPI is used to determine many, many adjustments in funding for various programs, retirement benefits and entitlements that both federal and state governments are responsible for. Colas (cost of living adjustments) are based almost entirely on the CPI from year to year. Increases in Social Security benefits, as well as increases in wages for contracted and union employees, are predicated on the movement of this statistic. Your tax rates are indexed to the CPI, as well. Since the cost of living nearly always goes up, the decent folks that, at one time, ran our government configured the above programs so that you wouldn't be overly injured by the extra costs. By reducing, or "adjusting", the CPI by as little as 1.1%, your representatives will have accomplished all that I warned of without ever actually voting on any program or benefit.

Who performs the research that sets this percentage and what actual figures are looked at to determine where it should be fixed? The Bureau of Labor Statistics has a well deserved reputation for their professionalism in examining the data that they collect to establish this figure as precisely as possible. The criteria they use is both objective and subjective as they tally not only the actual costs of predetermined goods but also the increase or decrease in the perceived standard of living for all classes of Americans (the costs of crime, justice, vehicle congestion, etc.). It is, at best, a very difficult figure to arrive at but, until the latest sessions of Congress, was accepted by nearly all economists as the most accurate indicator available.

So what really changed in regards to the CPI? Actually, absolutely nothing save for some massive alterations in what the Bureau of Labor Statistics is allowed to include in their formula. The new statistics will include such wonders as: VCRs have more features than before but cost virtually the same, expensive new cars include more air bags than earlier models, your phone has many new features, computers do so much more, etc., etc.

What, you might inquire, do these imagined improvements add to the life styles of America's poor and retired who cannot afford these appliances and services in the first place but will be affected the most by their reduced incomes? And how, pray tell, does the overall decrease in personal safety, decreased medical services, increases in air and water pollution, reductions in business services and the like affect this statistic? That question can only be answered by the supposedly "neutral" Boskin Commission, appointed by the Senate Finance Committee and comprising only economists who had previously stated their contention that the CPI was too high. Were there any dissenting voices allowed on the panel? Not a chance! The only question that was ever considered, without even the semblance of fairness that interviewing other experts or open hearings might convey to the public, was how much to decrease the percentage.

What was the purpose of this charade? Well, your representatives made promises, without substantial explanations as to how they would implement them, that the voters are holding them to. The candidates swore to balance the federal budget without increasing taxes or decreasing Social Security benefits. But, you indignantly respond, they are, indeed, increasing my taxes and cutting Social Security benefits which will surely facilitate balancing the budget within their contrived time limits. How can they dare to so openly lie that even I, an average, TV watching voter can easily detect the difference between their rhetoric and their deeds? Easy as pie, my friends. They ain't doing a thing, it's the CPI that's causing it all. These slight of hand tricks make David Copperfield look like a second rate vaudeville act.

In effect, your representatives trust that the average American voter is so stupid that you can be tricked into accepting the lie that, once they manipulate the CPI, the results are no longer under their control.

Well, are you that dumb? A stamp on a postcard is all it costs to get their attention.

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