The
The real measure of inflation
THE REAL COST OF LIVING INCREASE INDEX
It exposes why middle-class Americans — salaried workers who are given routine pay hikes and retirees who depend on annual increases in their corporate pension and Social Security payments — can’t maintain their standard of living. Plainly and simply, the Index shows that their income can’t keep up with their expenses, and it explains why they increasingly have to turn to the government for entitlements to bail them out.
It’s because salary and benefit increases are pegged to the Consumer Price Index (CPI), which for more than a century has purported to reflect the fluctuation in prices for a typical “basket of goods” in American cities — but which actually hasn’t done that for more than 30 years.
The inaccuracy of the CPI began in 1983, during a time of rampant inflation, when the U.S. Bureau of Labor Statistics began to cook the books on its calculation in order to curb the increase in Social Security and federal pension payments.
But the change affected more than entitlements. Because increases in corporate salaries and retirement benefits have traditionally been tied to the CPI, the change affected everything. And now, 30 years later, everyone knows the long-term results. Ask anyone who relies on a salary or Social Security or a pension and he’ll tell you his annual increase in income doesn’t come close to his increase in expenses. What comes in is less than what goes out — a situation that spells disaster for average Americans.
Butowsky began calculating the Chapwood Index in 2008. Using social media, he surveyed his friends across the country to determine what they bought with their after-tax income. He narrowed the list down to the most frequent 500 items and asked his friends in America’s 50 largest cities to check the prices on those items periodically. The Index shows the fluctuation in each city in the cost of items such as:
Starbucks coffee, Advil, insurance, gasoline, sales and income taxes, tolls, fast food restaurants, toothpaste, oil changes, car washes, pizza, cable TV and Internet service, cellphone service, dry cleaning, movie tickets, cosmetics, gym memberships, home repairs, piano lessons, laundry detergent, light bulbs, school supplies, parking meters, pet food, underwear and People magazine.
Click here to see the complete list of the Chapwood Index 500 items.
DYI:
Surprisingly
the Chapwood index does not average all 50 cities to provide one national
number. Even though that number will be
a bit flawed it would certainly be significantly
closer to the truth than – let’s cook the
books – CPI numbers! I’m a bit lazy
and had no desire to add up all 50 cities to provide the average I did the next
best thing. Oakland California is the
highest over the past 5 year average with a 13.1% inflation rate AND Mesa New
Mexico the lowest, again a 5 year average inflation of 6.6%. So – drum roll please – U.S. average inflationary
rate 9.85%. Our wonderful boys and girls
at the Bureau of Labor of Lies and Statistic with their February 13, 2020
release – [before seasonal adjustment, of course] the number is: 2.5%!
Hopefully
you didn’t spit coffee all over your laptop computer!
Only
a mere 294% difference or almost 4 times higher! You and your families have to peddle the
economic bicycle 4 times faster just to maintain your standard of living. This is the reason many end up deeply in debt
to maintain or grow their standard of living at least in the short term before
the debt binge crashes on top of their heads!
Till
Next Time
DYI
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