Re: Fraud in the CPI


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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On Sat, 1 Dec 2007 11:04:48 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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On Sat, 1 Dec 2007 06:50:28 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"mg" <mgkelson@xxxxxxxxx> wrote in message


<snip>


I think my confidence level in their calculations would be higher, if
they only allowed for upward substitutions. If they were to do that,
then they could definitely say that the calculation has not adversely
effected the quality of life. In other words, I would like the
bastards to change the system so that the base calculation is for
hamburger and then allow for steak substitutions, for instance, if the
price of hamburger goes up.

Are you sure that such is *not* adjusted for? (Obviously, the price of
steak
can never be less than the price of hamburger, but if the consumer were
to
start purchasing steak at a buck a pound after hamburger rises to 5
bucks,
????)



Steak is steak and hamburger is hamburger. That's not
complex. One is generally agreed to be a "better" lifestyle
than the other (though I might not agree in the case of
Las Vegas Prime Rib which I think is ghastly despite that
I'm an ardent beefivore).

There has never been any suggestion, in any Social Security document
(which
is the the context we're discussing this in) that the purpose of Social
Security and the CPI was to "maintain a person's lifestyle."

It's a safety net program designed to replace a portion of personal
retirement income.



But the question at present, is it not, is whether the official
CPI genuinely preserves the buying power that it used to.
Substituting hamburger or steak would not be an example
of "preserving the buying power that it used to."

No, but let';s not pretend that the chicken/steak example invalidates the
entire notion of subsitution. It in and of itself might not be the best
type, but I think you'll agree that the basket of goods ought not contain
"One button-down cotton oxford shirt made by Hart, Shaffner, and Marx" but
"One button-down cotton oxford shirt."

If the former, a good deal of cost increase appears in the CPI over the
years; but, I can buy that same quality of shirt for the same price I did 25
years ago -- because of subsitution.

JG






JG


That is, unless rich people have
to buy rowboats instead of yachts, but their lifestyle is
unchanged because they've merely made a substitution
and they still have boats.

"It is mere cozenage all."


<snip>




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