WASHINGTON -(Dow Jones)- Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks.Read the rest here.
According to congressional aides familiar with the discussions, the proposal would shift how the Consumer Price Index is calculated to reflect how people tend to change spending patterns when prices increase. For example, consumers tend to drive less when gas prices increase dramatically.
Such a move is widely seen by economists as resulting in a slower rise in inflation. That would impact an array of federal programs that are linked to CPI including the Social Security program and income tax brackets set by the federal government.
The proposal could lower federal spending by around $220 billion over the next decade, based on calculations by last year's White House deficit commission, which recommended the change as part of its final report.
According to two congressional aides familiar with the budget negotiations, the shift is being "seriously discussed" as part of the ongoing talks to strike a budget deal, that would be used to ease the passage of a required increase in the country's debt limit.
Here we go again. How many ways can Washington Pols lie to us and rob us at the same time? The current methodology is already wildly inaccurate in its measurement of inflation. (It has been changed several times since Jimmy Carter's tenure in order to lower inflation numbers.) This is just more of the same financial repression and cooking of the books that Washington tries whenever the red ink gets a bit too thick. They are printing money at record rates and now they want to hide the inflation they are creating while stiffing people to whom they promised benefits that would be indexed to inflation. Most of those people would of course be the old and the very poor.
One group of people that will also get robbed will be those poor saps who were/are dumb enough to buy TIPS (Treasury Inflation Protected Securities). Those are government bonds that are supposed to protect the holder from inflation. You can kiss that money good-bye.
Yes ladies and gentlemen, Washington DC is inhabited by a pack of low life lying scoundrels. But they are our low life lying scoundrels and we love them. After all we keep electing the bums.
P.S. I had to rewrite that last paragraph about 5 times before I got it clean enough to post on a Christian blog.