Chained CPI

Democrats and Republicans both want to reduce the deficit using an accounting gimmick called “Chained CPI.” Under the Chained Consumer Price Index, increases in prices of products are ignored. Instead, it is assumed that consumers downgrade their purchases to cheaper products when prices for those they currently buy increase to the point that they can no longer afford them. Then the government uses these phony calculations to justify smaller cost of living increases to recipients of Social Security and other beneficiaries of programs indexed to inflation.

2 thoughts on “Chained CPI

  1. In the same vein of voodoo economic analysis, the cheerleaders are very excited that the US is suddenly & unexpectedly projected to soon become the world’s leading oil exporter. Rah, rah, rah.

    Of course, it has very little to do with increased domestic oil production but rather is a result of domestic demand having fallen off its own “consumption cliff” as millions have been devastated by the Second Great Depression.

    If a little austerity is good for our oil exports then a LOT more will be a LOT better.

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