The Government Lies About Everything...Inflation Is No Exception
By Dave Gibson (09/06/07)
Though the federal government claims the current rate of inflation is a mere 2.36 percent, working Americans know better. However, considering the irrelevant and confused method in which the feds calculate the rate of inflation along with the omission of critical price information, it is little wonder the official rate makes no sense.
The federal government uses the Consumer Price Index (CPI) to calculate the rate of inflation...Well, sort of. The CPI is derived by collecting prices of goods and services in 87 urban areas, 23,000 retail establishments, and 50,000 landlords and tenants. However, the government then omits some very pertinent data such as energy and food prices and refer rather to the 'core CPI.'
Though housing prices have been rising at incredible rates over the last several years, the rate of inflation has never reflected the sky-rocketing costs because only rent is used as part of their equation. Actual home prices have never been included.
Federal, state, and local income taxes are left out of the equation, as are gasoline and home heating oil prices. Education, insurance, and health care costs are either left out or vastly under-reported. Basically, the feds look at the price of a Chinese-made shirt being sold at Wal-Mart and compares it to the price from last month in order to arrive at the current rate of inflation. Considering that discount retailers Target, Wal-Mart, and Kmart operate at least 8,100 stores in the U.S. between them, those store prices alone could account for more than a third of the CPI. But as you and I both know, man cannot live on cheap Chinese goods alone!
The following is a list of a few goods and services and how much their costs have risen in the last ten years:
Average price of a gallon of gas: (1)
Sept. 7, 1997 - $1.27
Sept. 5, 2007 - $2.79
Average yearly cost of college tuition: (2)
1997 - $3,111 public/$13,664 private
2007 - $5,836 public/$22,218 private
Oil prices per barrel:
Sept. 1997 - $20
Sept. 2007 - $74
Average home price: (3)
1996 - $166,400
2006 - $305,900
Average annual employee contribution to health insurance: (4)
1997 (single policy) - $264
2007 (single policy) - $627
With President Bush and the Federal Reserve churning out U.S. dollars with all the thought given to making confetti, we are actually living through a period of hyper inflation with no end in sight. That may be why the federal reserve recently stopped publishing the M3 figures which shows the actual amount of U.S. dollars being held worldwide.
Contrary to what Bush's liars for hire tell us, our economy is in rough shape. But we already knew that didn't we?
Source data: (1) Trindy Lundberg survey, (2) CNN, (3) U.S. Census data. (4) UCLA-KPMG survey.
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